Mowi expects a tighter market in the time to come.
“Demand is on the road to full recovery driven by less restrictive Covid-19 measures. Global supply growth projected to be two per cent for 2021. Previously low price levels and a shift in demand towards more elaborated products are expected to boost demand for Covid-19”.
Based on what Mowi wrote in its presentation material for the first quarter of the year, there is no doubt where the salmon giant’s management expects the market to move forward.
Positioned
And Mowi has positioned itself to capitalise on a higher salmon price.
“The contract share has been deliberately reduced to position the company to benefit from increasing prices,” the salmon giant wrote.
The most important division in Mowi, Farming Norway, brought in EUR 149 million of a total group EBIT of EUR 268.3 million in the first three months of the year. Here Mowi has placed itself at the lower end of its contract share strategy. The company is guiding a contract share of 25 per-cent.
Correlation
From the begining of the year, the spot price for salmon has risen steeply – from EUR 4.5 to current levels around the EUR 6.8. If you’re going to believe Mowi, the salmon price has more to go on in the future.
Historically, Mowi’s share price has shown a clear correlation with the salmon price. High salmon prices mean higher earnings, and a rising share price.
