SalMar (Buy, TP: NOK780.00) - Q2 misses expectations
SalMar reported operating EBIT of NOK1,048m, ~9–7% below our forecast and consensus. The miss was driven by lower realised prices than expected in the Central region. Region North and Sales & Distribution beat our estimates, while Icelandic Salmon reported in line. Management guided for slightly higher costs in Q3, in line with our forecast. We find the Q2 miss to be “low quality” on realised prices, while the more important cost side was in line. There were no changes to the harvest volume guidance for 2022. We expect the stock to drop less (1–3%) than the potential consensus 2022 EPS cut (c5%).SalMar is a producer of Atlantic salmon and is integrated from roe and smolt to products and sales. Co. has farming operations in Central and Northern Norway, as well as in Scotland. Co. has operating licences for marinephase fish farms and hatcheries in central Norway and Troms County. Co. has 66 licences for production of farmed Atlantic salmon in Norway: 53 in central Norway (More & Romsdal, South and North Trondelag) and 13 in northern Norway (Troms)
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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