A Financial and Strategic Analysis of SalMar

Besarta Kurti & Mergim Tahiraj

Student thesis: Master thesis


This thesis is written with the aim to find the fair value of SalMar AS. To fulfil our objective, a fundamental analysis has been conducted before the discounted cash flow model and the EVA model have been applied in estimating the fair value. To ensure that the value is calculated from two perspectives, a peer valuation has also been conducted. The two former models have in turn been subject to sensitivity analysis so as to reduce potential uncertainties and biases. SalMar is a fully vertically integrated salmon farming company which has been listed on the Oslo Stock Exchange since 2007. The company has experienced tremendous growth through acquisitions and innovative initiatives during the last decades. SalMar’s recent innovation concept, Ocean Farm 1, is the world’s first offshore facility which is expected to challenge the traditional way of farming. Being pioneer in the area of offshore farming has made SalMar an interesting investment opportunity amongst investors. SalMar has continuously been perceived as the most cost-efficient salmon farmer worldwide and as our analysis shows, the company managed for the first time in many years to reverse production costs. The company delivers a strong financial performance year after year, positioning itself well for future growth. A fair value of NOK 444,37 was estimated using a weighted average cost of capital of 6,09%, implying a potential upside of 18,5%. The upside potential is due to our optimistic view of SalMar’s abilities to scale up offshore farming and maintain the position of cost-leadership. The valuation based on multiples yields a share price in the range between NOK 129,88 – 448,14, while the two potential strategic directions Increased focus on VAP and Integrate feed production yield share price ranges of NOK 364,16 – 595,12 and NOK 283,38 – NOK 576,10, respectively

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2018
Number of pages172