Marine Harvest 430,000 tonnes production target is “too ambitious” say Sparebank1 Markets

Aslak Berge

Marine Harvest’s 2019 volume guidance also sends mixed signals, said Sparebank1 Markets analyst, Tore A. Tønseth.

The analyst poured through today’s Q3 report from Marine Harvest. The operating profit, which was already widely known after a previous trading update, did not give way to any major surprises but the anaylist belives that MH’s 2019’s volume guide is too ambitious.

“Total volumes are seen at 430kt (gw), which is up 50kt (13%) from 2018. If we adjust for Norther Harvest total volume should increase around 40kt. Total expected global volume growth in 2019 is seen around 70kt (gw), which means that MHG is planning to take majority of the global growth in the period – implicitly saying that rest of the farmers will show only marginal growth,” Tønseth wrotes in a report to his customers.

“From our perspective it looks like MHG’s volume guiding is too ambitious – or that the global volume expectations for 2019 are too low. Both signals could potentially be negative,” he noted.

Pareto analyst, Carl-Emil Kjølås Johannessen, reported that the company delivered an adjusted EBIT of EUR 207 million, corresponding to an all-inclusive margin of EUR 1.9/kg (NOK 18.1/kg), is in line with the level indicated in the trading update.

“The result is positively impacted by strong margins in Norway, especially in the north region, as well as a solid MH Markets result,” wrote Kjølås Johannessen in an update.

“MHG guides 2019 volumes of 430k tonne, slightly lower (-1.6%) than our 437k tonnes estimate but above (+1.1%) consensus of 425k tonnes. For 2018 the company reiterates its volume guidance, while we had estimated a ~1% cut. We expect to make fairly limited estimate changes (+/-1%) on our 2018e-2020e,” concluded Kjølås Johannessen.


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