Kontali reduces biomass estimate, Sparebank1 upgrades shares

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Leaner Norwegian salmon biomass triggers change in valuation.

Over the last few months there has been a gap between the biomass numbers of Kontali Analysis on the one hand and the Norwegian Directorate of Fisheries’ on the other. Kontali has advocated a substantially larger salmon biomass in the sea than the other, which relate to reported and unreported numbers from the farmers themselves.

Chart from Sparebank1 Markets

On Friday, Kontali crunched the numbers and lowered their biomass numbers.

In line
Kontali estimated, according to a Sparbank1 report, end of August’s biomass to be in line with last year.
As a direct consequence of this, financial analyst Tore A. Tønseth at Sparebank1 Markets has chosen to upgrade the salmon shares he follows on the Oslo Stock Exchange.

Tønseth increased underlying salmon prices for 2018 and 2019 by NOK 1.50 (EUR 0.15) per kilo. This gives an increase in EBIT of 5-10 percent for most of Norway’s salmon farmers, he wrote in an analysis last night.

Changing
As a result of the change in prerequisites of Excel-spreadsheets, Tønseth changed his recommendations on several of the shares.

Lerøy and NRS have a buy recommendation, hold and sell respectively. Marine Marine has gone from sell to hold. Grieg Seafood, The Scottish Salmon Company, NTS and AKVA Group are unchanged at Buy. Bakkafrost and SalMar have a sell recommendation from Tønseth.