Atlantic Sapphire mortality “increases risk of further capital raising and likelihood of such events happening again”

Aslak Berge

Yesterday’s news of mass death at Atlantic Sapphire’s Miami facility is causing several investment banks to lower future expectations.

Yesterday, SalmonBusiness reported that Sparebank1 Markets lowered its volume estimates by 20 per-cent after the pioneering company lost 500 tonnes of fish in its tanks in Miami.

On Thursday morning, DNB Markets and Kepler Cheuvreux reduced their share price targets on Atlantic Sapphire to NOK 170 and 150 respectively, from previously NOK 180 and 155. However, both maintain a BUY recommendation of the stock, reported TDN Direkt.

Equity Issue?
Kepler highlighted the event has a limited direct impact on the valuation of the company but pointed out that it increases the risk of further capital raising and the likelihood of such events happening again.

DNB Markets wrote that the incident in Florida is a reminder that the land-based aquaculture industry is still in a start-up phase and that there will be uncertainty about the stability of the operation of the companies’ facilities.

“Given the incident, we have adjusted the risk premium for successful and stable operations slightly up and the price target corresponding to down from NOK 180 to NOK 170,” wrote DNB Markets.

Dragged down
The day after the production accident, Atlantic Sapphire blamed its RAS supplier Billund Aquaculture. Billund told SalmonBusiness that they did not understand or were informed of the criticism.

GRAPH: Infront

Atlantic Sapphire’s share price fell 11 per-cent yesterday and continues to fall on Thursday.

This has also dragged the share price of other land-based salmon farmers. The GM land-based salmon farmer Aquabounty Technologies’ share price fell as much as 18 per-cent on the Nasdaq Stock Exchange in New York on Wednesday.


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