SalMar credit rating is bumped down a notch
Analysts cite salmon farmer's slower-than-expected debt reduction and lower profit margins for the change
Salmon farming heavyweight SalMar, which issues bonds as a way of funding its capital investment programme, has been given a reduced long-term issuer rating by Nordic Credit Rating.
SalMar’s rating has been lowered from BBB+ last year to BBB. At the same time, its short-term issuer rating was lowered to N3 from N2 and its senior unsecured issuer rating was lowered to BBB from BBB+.
“The rating action reflects that the company's deleveraging (debt reduction) is taking longer than expected and that projected EBITDA margins are lower due to reduced salmon price expectations,” writes Nordic Credit Rating.
“While a weaker-than-expected performance in recent years can partly be attributed to factors outside SalMar’s control, such as disease outbreaks and periods of oversupply affecting prices, it nonetheless highlights the company’s increased risk appetite following higher financial leverage from acquisitions over the past five years.”
Debt reduction
Nordic Credit analysts expect salmon prices to average around NOK 84 per kilo for the next year, which is NOK 10/kg lower than their expectations 12 months ago but better than the NOK 78/kg seen in 2025.
“We continue to expect SalMar to prioritise debt reduction over the coming years, though at a slower pace than previously anticipated,” write the analysts.
“This is supported by improved cash flows, driven by EBITDA margins recovering to about 30% (from about 22% in 2025). The higher projected margins also reflect expectations of increased harvested volumes and lower unit costs, resulting from sustainable improvements in biological performance and reduced feed prices.”
Nordic forecasts that SalMar’s net debt will decline by about NOK 4-5 billion (£313m-£391m) in 2026 as the company focuses on strengthening its balance sheet. Combined with improved cash flow, this is expected to increase its funds from operations (FFO)-to-net debt ratio to over 30% in 2026, from about 16% in 2025.
Stable outlook
One positive change to SalMar’s rating is that Nordic now classes the outlook for the company as “stable”, instead of the “negative” rating given last year.
This reflects the analysts’ view that limited supply growth will support global salmon prices over the next three years and that vaccines and new technology will positively impact biological costs.
“We could raise the rating to reflect a proven ability to maintain EBITDA margin above 30% together with FFO-to-net debt above 45%, both for a protracted period. We could also raise the rating if we see a lower cost level achieved by sustainable improvements in biological performance,” they write.
“We could lower the rating to reflect increasing biological problems, such as disease and sea lice, or and EBITDA margin below 20% or FFO-to-net debt below 20% for a protracted period.”
SalMar is the world's second largest Atlantic salmon farmer, after Mowi, and is co-owner of Scotland's second-biggest salmon producer, Scottish Sea Farms. SalMar expects to produce 296,000 gutted weight tonnes from its operations in Norway, SalMar Ocean (the company's offshore segment) and Iceland this year, along with a half share of the 43,000 gwt guided by Scottish Sea Farms.
According to its report for the fourth quarter of 2025, SalMar Group ended last year with total interest-bearing liabilities of NOK 21.6bn, down from NOK 22.45bn at the end of Q3 2025.
