Expect more from Mowi after uplifting quarter

Aslak Berge

Salmon giant beats all expectations.

On Monday morning, Mowi delivered its quarterly trading update with results for the second quarter of the year and the figures were better than expected.

“EBIT adj. came in at EUR 208 million, which was in line with our estimate but 5% above consensus. Harvest volumes were 98.5k tonnes, in line with previous guiding and our estimate of 98k tonnes, with higher volumes in Norway offsetting lower volumes in UK/Canada,” wrote Pareto analyst Carl-Emil Kjølås-Johannessen in a bulletin sent out before the opening on Monday.

Solid in the UK
“Margins in UK were strong, and the turnaround is definitely continuing. Margins in Canada were however on the weak side, while the other regions delivered in line with our expectations. The recognition of the insurance income related to the fire at the Kirsten plant is not included in the Q2 result, as this process is delayed,” he added.

Kjølås-Johannessen believes that growth in the sea will be good in the second half.

“We expect to make limited estimate changes, as we believe Mowi will reiterate its full-year volume guidance despite some biological challenges in Norway, as the growth in other regions in Norway should have been good. We have a Hold recommendation with price target NOK 220 (EUR 23) on Mowi,” he continued.

Will get more
Even Sparebank1 Markets won’t be making major changes after today’s report.

“In total, we expect just minor changes to our estimates, but we believe consensus will have to come up somewhat (5% deviation). It is also worth remembering that MOWI typically has EUR 2-3m in buffer on these trading updates, so actual operational EBIT this quarter is likely to come in around EUR 210m (6% above consensus, 3% above SB1M),” wrote analyst Tore A. Tønseth in a mail-out to his customers.

Sparebank1 Markets has a buy recommendation on the Mowi share, with a price target of NOK 230 (EUR 24).


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