Forecasts revised after disappointing Grieg report

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Grieg Seafood takes a beating after disappointing second quarter results.

Grieg shares fell 6.3 per cent on Wednesday, after the fish farming company presented its Q2 figures. Published well before the stock exchange opened, the results was significantly weaker than analysts had predicted. At the same time, the outlook was also weaker than analysts had expected.

Read also: Downgraded fish prices dent Grieg EBIT

“Clearly disappointing for the cost indications into the second half of the year,” commented Lars Konrad Johnsen, an analyst for Swedish investment bank Carnegie, to TDN Direkt on Wednesday.

He pointed out that the brokerage house had expected cost improvements in all regions into the second half of the year, while the company’s prospects indicate a stable cost per kilo in Rogaland and Canada.

“We expect to reduce our 2021 estimates further,” wrote Johnsen, who before the release of the figures had a hold recommendation with a price target of NOK 85.

Another who is not particularly impressed is Thor Chr. Jensen, a market commentator for leading Norwegian financial daily, Dagens Næringsliv. He believes that the board of Grieg Seafood should consider whether to sell the company to one of the other salmon farming companies on the Oslo Stock Exchange.

“It will probably give a higher return on the capital employed. Today’s shareholders in Grieg Seafood could agree to a merger if the settlement took place as a share-based transaction or a mixture of cash and shares. The Shetland money could be distributed as an extraordinary dividend to the shareholders,” Jensen wrote in today’s market comment.

Grieg was last traded at NOK 82.70, and has thus fallen by 23.3 per cent in the last 12 months.