MH investors advised to sell

The report coincides with the announcement of a quarterly dividend of NOK 1.2 per share (consensus 1.07, Nordea 1.1) and the analyst picks out a number of positives from the report.

“They raised their 2015 volume guidance to 440k tonnes (from 430k), mainly due to expected higher volumes in Chile. They are positive on the underlying demand in key markets, though pointing out challenges related to the soft demand in Russia. Their next feed factory will be built outside Norway; we believe Chile is the obvious spot after the tentative Aqua Chile deal. All in all a positive report compared to expectations and we expect the share price to increase today,” he reflects.

Q4 in brief 

“The operations in Norway were influenced by higher spot prices compared to Q3, but also continued cost challenges. Region North now is the best performing area, which also is in line with peers. They also increased their self-supply rate of feed to 80% during the quarter. Sea lice and amoeba challenges are the main reason for high cost in the quarter,” Giskeødegård notes.

“Chilean EBIT NOK 0.6 per kilo is a result of challenging market conditions as cost development is favourable.

“Guiding up 2015 volumes already now, mainly driven by Chile.

“The company remains confident on the market, although the current 2015 forward price (NOK 41) has come down by NOK 2-3 since mid-December. Their conclusion is that this price points towards a strong market also in 2015.

“We view the increased volume guidance (surprising they are guiding up already now) to be a function of more optimism related to the volumes they can produce from the recently acquired company Aquinova in 2015. It might also be a sign that the expected drop in Chilean production in 2015 is not for real (same volumes as 2014, 600k tonnes for the whole industry). All in all a positive report compared to expectations,” Giskeødegård concludes.