Analyst sees no reason why SalMar should go ahead with the NTS deal

Aslak Berge

Kepler Cheuvreux has shaved off the estimates for SalMar’s offshore plans, believing that the NTS/NRS/SalMar deal is going down the drain.

Large-scale fish farmer SalMar has taken a beating after the government presented its proposal for the national budget last Wednesday. The company is being hit extra hard for two reasons: Its resilient and capital-intensive plans for offshore farming and its acquisition of competitor NTS this spring.

Also read:  SalMar needs more time for the merger with NRS

SalMar has fallen heavily on the stock exchange recently. Source: Infront

Investment house Kepler Cheuvreux has, in an update reported by TDN Direkt, lost faith in both parts, and downgrades SalMar to hold from buy and Norway Royal Salmon (NRS) to reduce from hold, and lowers the price targets to NOK 360 and NOK 125 respectively from previously NOK 825 and NOK 250.

For SalMar, Kepler removes NTS/NRS/Salmonor from the estimates, adds a 40 percent resource rent tax on Norwegian farming and lowers the offshore estimate to 20,000 tonnes by 2030, against the previous 80,000 tonnes. They further increase the average cost of capital by 70 basis points.

Also read:  SalMar’s stock market value has been halved in a short time

Kepler sees no reason why SalMar should proceed with the NTS/NRS/SalMar agreement on the current terms, while they do not rule out that other terms can be discussed in the future.


Company recommendation target price
-------------------------------------------------- -----
SalMar Hold (Buy) 360 (825)
Norway Royal Salmon Reducer (Hold) 125 (250)
Austevoll Seafood Buy 108 (158)
Bakkafrost Buy 725 (750)
Grieg Seafood Hold 75 (140)
Lerøy Seafood Buy 60 (90)
Mowi Buy 170 (272)

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