Disappointing Q1 for Lerøy and Austevoll: “The stock exchange reacts somewhat more than one might expect”

Andreas Witzøe

However, Nordea Markets salmon analyst Kolbjørn Giskeødegård is not surprised that the market sends both Lerøy Seafood Group and Austevoll Seafood sharply down on the Oslo Stock Exchange after they both delivered weaker quarterly figures than expected.

Lerøy is hammered down after a disappointing quarterly report and as of Tuesday morning, more than eight per cent down on the Oslo Stock Exchange. Austevoll, a majority owner of Norwegian seafood company Lerøy, is down almost ten per cent.

The companies previously presented the results for the first three months of the year, and these were far weaker than expected by the brokerage houses that follow the stock.

Read more: €30 million reduced profit for Austevoll Seafood

Kolbjørn Giskeødegård is not very surprised that the market opened negatively and sends the shares down sharply.

“I still want to say that the reaction we have seen is probably in excess of what one might expect, but this is sometimes the case,” he said to SalmonBusiness.

Still attractive
Despite the strong reaction to the Oslo Stock Exchange, Giskeødgård believes that there is no reason to panic.

“We still think these are attractive shares to own, but it is clear that when delivering such weak number, it is in the cards that analysts want to adjust their 2019 estimates. Anything but a negative market reaction would have been a surprise,” he added.

Sparebank1 Markets’ salmon analyst Tore A. Tønseth expects to reduce its estimated Lerøy EBIT by at least five per cent after the report and will consider its purchase recommendation.

The problems continued in Sjøtroll
Analyst Giskeødgård highlights the problems that were also seen in the fourth quarter of 2018 at Hordaland operations as a surprisingly weak point in the quarter to Lerøy.

“We knew the problems would continue into the first quarter of this year, but it would have had a stronger negative effect that we and the consensus had. Whitefish side delivered better than we expected, mainly due to higher cod prices and higher product processes in general. The back of the medal there is that an intense raw material competition means that one probably gets a margin squeeze on the land side,” said Giskeødegård.

About Austevoll, he points out that they had expected somewhat stronger performance improvement from the pelagic segment.

“Otherwise, it’s Lerøy’s numbers that pull them down too,” concluded Giskeødegård.


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