Norwegian salmon prices are likely to remain strong over the next three years as a result of low supply growth, Nordic Credit Rating (NCR) said in a report published today.
Historically, prices have proven resilient to adverse economic conditions (with the notable exception of the COVID-19 pandemic). But while annual average prices are likely to remain stable in euro terms, any appreciation of the Norwegian krone could have a negative impact on revenues for the country's salmon farmers, the agency said.
"We take a through-the-cycle perspective and normalise margins when we assess salmon farmers' creditworthiness," said NCR credit analyst Geir Kristiansen. "Higher prices will, all else being equal, lead to stronger cash flows, theoretically allowing a reduction in net interest-bearing debt and improved credit metrics. However, we believe that higher prices could trigger more investment in new farming methods such as offshore and land-based farming, potentially offsetting the benefits of higher profitability."
Contacts:
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@nordiccreditrating.com
Christian Yssen, analyst, +4740019900, christian.yssen@nordiccreditrating.com