SalMar (Hold, TP: NOK440.00) - Hiccups in Q3
Operational EBIT was NOK614m, 2% below our estimate and 1% below consensus. The results were strong in the central region, but weak in the north, where the guidance is for an improvement in Q4. The harvest guidance of 145kt in Norway for 2019 was maintained, while the 2020 guidance for 152kt was slightly below our expectation. The CEO sees significant improvement potential. We have cut our EPS by 5.7% for 2019e and 2.5% for 2020e, but reiterate our HOLD and NOK440 target price. A capital markets day was set for Q2 2020.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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