Valuation of SalMar ASA

Fredrik Magnus Wraamann & Magnus Størseth Mathisen

Student thesis: Master thesis


Global negative supply shock The Chilean market have suffered from a algae bloom, which likely will reduce 2016 output by 100-120kt. As the Norwegian market has reached a production limit, and production volume is expected to fall in 2016, the global market is experience a large negative supply shock. This results in a high salmon price in 2016, and is expected to remain high in the years to come, due to high demand. Stricter Norwegian regulation The Norwegian government has addressed that the industry might increase their production volume with 6% every other year from 2017, if they fulfill biological requirements related to sea lice. Because of the limited growth possibilities for Norway in the future, the price will remain high until the output from technological innovation comes into effect. R&D licenses SalMar have been awarded with eight R&D licenses in order to continue their ocean farming project, which can add 7kt. Other companies have also applied for R&D project, suggesting that the supply will recover in the future. This will result in a lower long term salmon price. Growth from MAB and Acquisition SalMar is expected to continue their growth through acquisitions, but at the lower pace. The production growth will therefore decline, as the Norwegian government will not allow the industry to produce more unless they solve the sea lice problem. Cost will stabilize Cost related to feed and sea lice have increase significantly the latest years. We believe the cost will stabilize in the future, as the sea lice problem eventually will be solved, and the feed cost will decrease due to a reduction in the expensive marine content.

EducationsMSc in Applied Economics and Finance, (Graduate Programme) Final ThesisMSc in Accounting, Strategy and Control, (Graduate Programme) Final Thesis
Publication date2016
Number of pages163