Strategisk regnskabsanalyse og værdiansættelse af Bakkafrost

Tróndur Hentze Sørensen

Student thesis: Master thesis


The purpose of this master thesis is to estimate the fundamental value of Faroese based salmon farming company Bakkafrost as of the 1st of June 2012, through a financial and strategic analysis. Through the strategic analysis it was evident that the growth potential for Bakkafrost in the Faroe Islands is limited and any future growth will have to originate from activities outside the Faroe Islands. Additionally the expected growth of the global supply of salmon is not meet expectations due to lack of access to new licenses in Norway and the inadequate infrastructure in unexploited regions in Chile, which are essential in driving the global supply upwards. On the other hand, with the increased focus on healthier living and the advancing middle classes of emerging BRIC countries, the demand for salmon is expected to grow. Furthermore the strategic analysis shows that technological advancements in the salmon farming industry have led to fierce competition on the international market and the indication that long term prices on salmon could be on the rise, which is evidence of potential gains to be made. The financial analysis is based on historical data, in the form of income statements and balance sheets spanning the past five years from Bakkafrost and Havsbrun respectively. Bakkafrost acquired Havsbrun on the 31st of June 2012 and the data shows that Bakkafrost is a highly efficient salmon producer with some of the best biological and financial results in the industry. In relation to the effects the geographical location of The Faroe Islands and the local know-how have had on this, it was found to be a mixture of both. The valuation of the company was done using both DCF and EVA. An WACC of 5,95 % was used to discount the future cash flows, and this lead to a valuation of Bakkafrost as of the 1st of June 2012 to 65,65 DKK a share, which is a increase of 76%, in relation to their stock price of 37,13 DKK (39 NOKK) of that date. The sensitivity of the found price was tested through a sensitivity analysis that showed that Bakkafrost price estimate is highly sensitive to changes in WACC and terminal changes to growth and EBIDTA-margin.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2012
Number of pages133