Mowi’s higher than expected harvest volumes indicates upside risk, say analyists

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Salmon giant swims against the current on a weak Oslo Stock Exchange.

On Tuesday, Mowi presented the trading update for the first quarter of the year. This contributed to limiting the general decline on the Oslo Stock Exchange.

Driven by more harvest than expected, the operating profit, of EUR 109 million, was 20 per-cent better than expected. As a result, Mowi shares rose 2.4 per-cent on a falling stock exchange. By comparison, the OBX index fell 1.5 per-cent on Tuesday.

The Consumer Products segment delivered far better than DNB Markets expected, while Feed was the only weak one in the update.

“The EUR 4.2 farming cost in the quarter marks a continued positive cost trend. We see this as a strong report and see consensus for EPS in 2021 up 2-4 per-cent after the report, and expect the stock to trade up similarly today,” wrote DNB analyst Alexander Aukner.

Analyst Kjetil Lye of Handelsbanken Capital Markets wrote that he believes that the higher-than-expected harvest volumes in the first quarter provide some upside risk to the full-year estimate of 445,000 tonnes in 2021.

“We will probably lift the 2021 EPS by 4-5 per-cent after the update,” the analyst wrote.

ABG Sundal Collier was also pleased with today’s Mowi update.

“With a higher-than-expected operating profit in the first quarter, combined with net interest-bearing debt in line with our estimate and consensus, this indicates some upside risk to our dividend assumption of NOK 0.50 per share for the quarter,” the investment bank wrote.