MARINE HARVEST - Rating Report
RATING RATIONALE
- We affirmed the corporate rating of Marine Harvest ASA at BB.
- Our rating is supported by (i) the group’s continued solid operating profitability driven by record high salmon pric-es, which are expected to decrease while remaining elevated in 2018 and 2019, and controlled farming costs; (ii) our expectations that net adjusted leverage (net adjusted debt- to- EBITDAR ratio) will not deviate materially from the currently low 1.0x in the mid-term; (iii) the increasing diversification of Marine Harvest’s activities with further upstream integration (fish feed); and (iv) its solid liquidity profile.
- Our rating is constrained by (iv) the substantial impact on margins from small changes in salmon and fish feed prices, (v) large shareholder distributions based on a specific debt target, which, given the current headroom under that target, implies some releveraging, and (vi) the vulnerability of the business due to significant biologi-cal risks including the outbreak of fish diseases.
Spread Research is France's first Rating Agency, registered by ESMA (European Securities and Markets Authority) and a leading European Independent Credit Research firm, founded in 2004 and based in Lyon, France. Our experienced team offer key research services using a wide range of investment strategies and research methodologies for the High Yield, Emerging Markets, Convertibles and Loan Markets.
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