Oslo-based analysts in contact with SalmonBusiness agree Grieg Seafood’s earnings report Thursday — with its lower-than-expected margins and volumes — failed to live up to their expectations.
The company reported an operational EBIT of EUR 15.6 million, but the consensus among analysts was for EUR 25.7 million, with the salmon-watching Nordea having expected EUR 24.7 million. All noticed the switch transfer to 2018 of 3,000 tonnes of salmon from what might have been the fourth-quarter 2017 harvest.
Of Grieg’s planned EUR 67 million in capex, one-third is maintenance, said Kolbjorn Giskeodegaard, a Nordea Markets analyst. Together with high working capital, costs calculations could complicate dividend calculations, Giskeodegaard suggested.
“We should expect a negative share-price reaction from (the trading) start today,” he said. In the analyst’s books, Giskeodegaard has already qualified Grieg’s Q4 with “actual” numbers that reflect paper transfers of salmon to 2018’s accounting.
Another analyst specified unheralded and underreported algal blooms in Canada and the Shetland Islands together with the costs of being hemmed in by anti-lice rules in two Norwegian counties for believing expenses will trim back any production gains.
“This is not a good report from GSF, and we expect a significant negative share price response today,” said Tore Tonseth, an equity analyst with Sparebank 1 Markets.