November 6, 2018 / 6:40 AM / 10 months ago

Fish farmers Bakkafrost, Norway Royal lag Q3 forecasts

OSLO, Nov 6 (Reuters) - Oslo-listed fish farmers Bakkafrost and Norway Royal Salmon reported lower-than-expected third-quarter earnings on Tuesday amid outbreaks of algae and disease, and said 2019 output growth would lag analysts’ forecasts.

Shares of fish farmers have risen sharply in 2018 to trade at or near all-time highs, driven by high prices and supply constraints, with Bakkafrost up 43.8 percent year-to-date and Norway Royal up 86.4 percent.

Faroese Bakkafrost, the larger of the two, reported a 33 percent year-on-year fall in core operating earnings, also known as operational EBIT, to 168 million Danish crowns ($25.69 million), lagging a forecast of 190 million in a Reuters poll.

“The activity in the third quarter this year has been somewhat lower, compared to the same quarter last year. The quarter has also been affected by the elevated mortality level at farming site A-81 Kolbanagjogv,” it said in a statement.

Bakkafrost cut its 2018 output forecast to 46,000 tonnes of salmon from 49,000 tonnes seen in August, and set a 2019 target of 53,000 tonnes, less than the 55,700 tonnes expected on average by analysts.

Following the earnings release, Sparebank 1 Markets analyst Tore Toenseth reiterated a “sell” recommendation on Bakkafrost’s shares.

Norway Royal Salmon’s operational EBIT meanwhile fell 82 percent year-on-year to 35 million Norwegian crowns ($4.19 million), lagging a forecast of 42.7 million, and said it too had seen earnings depressed by an outbreak of disease.

It maintained a 2018 output forecast of 36,000 tonnes and set a target of 40,000 tonnes for 2019, lagging the 43,900 predicted by analysts. ($1 = 8.3588 Norwegian crowns) ($1 = 6.5395 Danish crowns) (Reporting by Terje Solsvik and Ole Petter Skonnord; Editing by Sunil Nair)

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