Investment banks expected Mowi to harvest 471,000 tonnes of salmon next year. Now the company is only guiding 445,000 tonnes.
There were no big surprises in Wednesday’s report for the third quarter when significant parts of it were already known in connection with the company’s trading update that was made public in October.
The most important element that is capturing analysts’ interest is the company’s estimate for its 2021 harvest volumes. This is less than expected.
Negative estimate revisions
“Volume guidance remains unchanged for 2020 at 442kt, introducing 2021 guidance of 445kt. That’s five per-cent below the median consensus of 471kt, and is likely to trigger some negative estimate revisions,” wrote Sparebank1 Markets analyst Christopher Robin Winter in an update.
Pareto analyst Carl-Emil Kjølås Johannessen also responded by adding that: “The company reiterates its guidance of 442k tonnes in 2020, but 2021 guidance of 445k tonnes is approximately five per-cent below the PAS/consensus estimates. This is mainly driven by low Canadian volumes also in 2021, as the biological challenges continue in the region. We expect limited changes for 2020 as both volumes and cost guidance are as expected, while we expect to lower 2021 estimates by 4-5 per-cent due to lower volume guidance,” Kjølås Johannessen wrote in a bulletin to its customers.
Pareto Securities, like Sparebank1 Markets, has a BUY recommendation with a price target of NOK 200 on Mowi. During the first half-hour of Wednesday’s Oslo Stock Exchange trading, Mowi’s share price was quite unchanged, at NOK 153.
Mowi boss Ivan Vindheim is not happy with the volume guidance for 2021.
“It’s not something we’re happy about. We’ve been through years of high growth, we’re big and it’s not that easy to grow percentages. Of course, we are not satisfied with almost standing still on an annual basis, and this is something the board and management will address in the future. This is a breathing room,” Vindheim told TDN Direkt on Wednesday.
Furthermore, he says the third quarter was a good operational quarter, all taken into account.
“We earned almost NOK 900 million (EUR 81 million .ed) in a quarter strongly influenced by weak spot prices and COVID effects. I think it also says a little about underlying demand for salmon, and doubt that there are many products that have stood against the decline in demand so well,” he said.