Higher harvest volume, but thinner margins than expected for Mowi

Aslak Berge

Investment banks measured after seeing salmon giant’s first Q3 figures.

On Tuesday morning, Mowi presented its quarterly trading update, stating the company’s operating EBIT is approximately EUR 146 million in the third quarter.

According to estimates obtained by Infront Data, an operating profit of EUR 155 million was expected, reports TDN Direkt.

One time fee
Pareto analysts Carl-Emil Kjølås Johannessen and Gard Aarvik are not impressed with the results.

“This is six per cent/ seven per cent lower than Pareto Securities/consensus [its estimates] which probably do not fully reflect the one-time cost. We are lowering our 2019e / 2020e estimates by three and two per cent, respectively, based on lower volumes in Canada and a weaker margin in the UK, while increasing Norwegian and UK volumes somewhat,” the duo wrote in a customer bulletin before the opening of the Oslo stock exchange.

“We make no changes to our price target of NOK 220 and uphold the Hold recommendation.”

Good growth
Sparebank1 Markets analyst Tore A. Tønseth wrote it was only one per cent below his forecast.

“Mowi (MOWI) delivers a third-quarter trading update close to our expectations with EUR 147m in operational EBIT, just 1% below our EUR 149m forecast and spot on consensus (adj. for EUR 5m one-off in Canada). MOWI harvested 117kt in the quarter, 4% higher than our estimate and MOWIs guiding, suggesting good growth in the sea. On the negative side, margins were slightly weaker than we expected with an operational EBIT of EUR 1.26/kg (NOK 12.4), 3-4% below consensus and SB1M,” Tønseth wrote in an customer email.

“If we look at the different regions, Scotland, Canada, Ireland and Faroe Islands are below expectations, but Chile and the most important region, Norway, are above. The trading update has a positive read-across to Norwegian farmers, like SALM, LSG and NRS, but slightly negative to farmers with exposure to Scotland and Canada, GSF and SSC (BAKKA). We expect just minor changes to our estimates. Our margins will come down slightly, but volume estimates will increase. With the current strong growth in the sea, it is not unlikely that MOWI will lift full-year volume forecast,” he added.


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