SalMar ASA: Harvesting Long-Term Growth from a Seasonal Slump

In the first quarter of 2025, SalMar ASA (SALM.OL) faced headwinds that sent its stock plunging on earnings day. Delays in harvesting, quality downgrades, and elevated costs in Iceland painted a challenging picture. Yet, beneath the surface, the company is executing a master plan to transform these temporary setbacks into a springboard for dominance in the global salmon market. For investors with a horizon beyond the next quarter, this dip represents a rare buying opportunity.

Temporary Operational Hurdles, Not Structural Weaknesses

SalMar’s Q1 struggles were self-imposed, not systemic. The delayed harvests—intentionally timed to build biomass—were a calculated move to prioritize long-term volume growth over short-term profits. As CEO Frode Arntsen clarified, the low average fish weight and downgrades stemmed from welfare-driven harvest timing, not poor farming practices. These issues are already resolving: entering Q2, SalMar’s biomass hit a record high for the season, positioning it to deliver on its ambitious 2025 harvest targets.

Meanwhile, Iceland’s persistent cost challenges are being addressed through operational restructuring. While the division’s high costs remain a drag, the company’s focus on efficiency gains and strategic divestments (if needed) signals a clear path to stabilization.

Strategic Acquisitions: Building a Fortress Balance Sheet

SalMar’s recent acquisitions of AS Knutshaugfisk and Wilsgård AS are textbook moves to amplify scale and reduce costs. The Knutshaugfisk deal adds 3,466 tonnes of licenses in central Norway, a region with proven salmon productivity. The pending Wilsgård merger, which will add 5,844 tonnes of licenses in northern Norway, creates economies of scale and operational synergies. Combined, these moves boost SalMar’s total Norwegian licenses to over 120,000 tonnes, solidifying its status as a top-three salmon producer.

The market has yet to price in the value of this expanded capacity. With the mergers set to reduce unit costs and streamline operations, SalMar is primed to outpace competitors in a sector where scale increasingly dictates profitability.

Volume Guidance: 17% Growth Isn’t Just a Number—It’s a Reality

SalMar’s reaffirmed 2025 harvest targets—294,000 tonnes across all regions—represent a 17% year-over-year increase, a figure backed by hard data. The record biomass entering Q2 ensures this growth isn’t aspirational. Consider this:
- Norway: The core operation is on track for 256,000 tonnes, leveraging its expanded licenses.
- Scotland: Scottish Sea Farms’ strong performance (high weights, low mortality) adds 32,000 tonnes of reliable supply.
- Iceland: Even if Iceland underperforms, the Norwegian and Scottish engines are powerful enough to drive the total.

Demand Trends: The Salmon Super-cycle Isn’t Over

Global salmon demand remains insatiable. Health-conscious consumers, rising disposable incomes in Asia, and a shift toward sustainable protein sources are structural tailwinds. SalMar’s focus on premium, eco-certified products positions it to capture this upside.

Meanwhile, SalMar’s management has the pricing power to weather near-term headwinds. As they noted, H2 2025 supply growth is expected to slow, potentially tightening markets and lifting prices—a scenario that plays directly to SalMar’s favor.

Why Buy the Dip Now?

SalMar’s stock has been punished for Q1’s EBIT miss, but the fundamentals are stronger than ever. At current valuations, the market is pricing in permanent failure in Iceland and ignoring the company’s strategic momentum. Here’s why that’s a mistake:
1. Undervalued: SalMar’s EV/EBITDA multiple is now below its five-year average, despite superior scale and growth prospects.
2. Catalysts Ahead: The Wilsgård merger (summer 2025) and Q3 harvest data will likely trigger a re-rating.
3. Dividend Resilience: Even with Q1’s challenges, SalMar maintained its payout, signaling confidence in cash flow stability.

Final Call: Plant Your Flags in the Fjords

The Q1 stumble was a necessary sacrifice to fuel future growth. With record biomass, strategic accretive deals, and a market hungry for salmon, SalMar is setting itself up for years of outperformance. This is the moment to buy—before the harvest season proves the skeptics wrong.

The numbers may look weak today, but they’re a fleeting storm in a sector where the horizon is sunny—and full of growth.