A Strategic Financial Analysis of the Salmon Farming Industry: A Fundamental Valuation of SalMar ASA

Johannes Irgens & Thomas Hauglund Gjølme

Student thesis: Master thesis


During the last decade, the value of Oslo Seafood Index has increased ten-fold. From being a part-time sub-industry in the early 1970s, Norwegian salmon farming has undergone a tremendous transformation. The development of salmon farming has gone from being fragmented to a consolidated industry driven by a series of M&As. In this respect, the objective of this thesis has been to determine the fair value of SalMar ASA, one of the world’s largest producers of Atlantic salmon. For this purpose, various valuation techniques have been applied, including the present value approach and relative valuation. The industry’s profits and cash flow are directly and indirectly influenced by the spot price of salmon. Meanwhile, the spot price of salmon is mainly determined by the interaction between supply and demand. A comprehensive analysis of the industry and the environment revealed that the prices of salmon are expected to increase. This is mainly due to favorable macroeconomic factors that is expected to contribute to increased demand for salmon in the future. On the other hand, supply growth is expected to stagnate due to natural, biological and governmental constrains. The fundamental analysis yielded a theoretical share price of NOK 630 as of April 26th 2021. Compared to the market price of 582.8, the valuation of the underlying asset indicates a discount of 8.1%. This suggests a potential upside for investors, which is unrelated to the general performance of the company. Finally, a special thanks to our supervisor, Andreas Zarp-Karsholt, who has helped us overcome the obstacles associated with this thesis. Additionally, we would like to thank Kontali Analyse for providing in-depth analysis’ and up to date industry data.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2021
Number of pages167