Salmon farmers a good bet, says bank

A LEADING Nordic financial institution has said it expects salmon farming companies to continue to show an increase in earnings this year.
Danske Banke, which is Danish owned and has operations in at least 16 countries, believes prices are expected to rise or at least remain stable this year and this means salmon stocks constituted a good investment buy.
Analyst Knut-Ivar Bakken told the Norwegian business journal Finansvisen that demand for salmon remained strong, with growth at around six to seven per cent likely over the remainder of the year.
The sector, he added, had made a good start to 2019, with salmon prices up by three per cent and global supply increasing by five per cent.
He conceded that price expectations have come down a little recently following a larger than expected growth in supply, but the overall trend remained positive.
‘We still expect some growth in average salmon prices,’ he said. ‘In general, we expect low to moderate supply growth over the next three to four years, as a result of relatively high capacity utilisation in Norway and Chile.’
He also predicted that despite experiments with new types of production, particularly in relation to land based farming, there was likely to be little change in methods in the medium term.
‘Regardless of whether land based or offshore farming becomes a success, volumes will not be large enough to affect market balance over the next four years,’ he said.
Bakken singled out Lerøy Seafood as one company to perform particularly well and to reward shareholders with higher dividends.
He said Austovell was another business to watch and, among the smaller breeders, Norway Royal Salmon also showed good, long-term growth promise.
He also expected Grieg to increase its share price and Mowi to deliver higher profits and volume growth.
Picture: Analyst Knut-Ivar Bakken