Improved Smolt Quality And Seyðisfjörður License Will Fuel Sustainable Production

Key Takeaways

• Investments in biosecurity, facilities, and smolt quality are driving higher yields, reducing risks, and improving profitability through lower mortality and greater operational efficiency.
  
• Strategic expansion, premium sustainable products, and increased regulatory alignment position Kaldvik for resilient growth in global markets and stronger long-term margins.
  
• Ongoing operational challenges, biological setbacks, expansion risks, shareholder unrest, and intensified competition threaten revenue growth, margins, and investor confidence.

Catalysts

Engages in the salmon farming business in Iceland.

• Recent and ongoing investments in smolt quality, land facilities, and biosecurity are now translating into materially lower mortality rates (down 30% YoY) and improved smolt robustness, which should increase production yields and drive improvements in revenue and gross margins as future generations benefit over multiple cycles.
  
• Imminent regulatory approval for the new Seyðisfjörður license, expected this year, will increase total production capacity by 10,000 tonnes, supporting future volume-driven revenue growth and offering operational flexibility to further de-risk supply and expand into new markets.
  
• Strategic expansion into the U.S. and Asian markets, supported by dedicated sales teams and the development of premium, traceable products, positions Kaldvik to benefit from global growth in demand for sustainable seafood, directly impacting top-line revenue potential.
  
• Ongoing industry trends toward traceability, supply chain transparency, and sustainability favor Kaldvik's advanced production methods and biosecurity advantages (no sea lice or major diseases), likely reducing regulatory risks and supporting resilient net margins over time.
  
• Efficiency gains from recent consolidation, new harvesting facilities, and fixed-price contract strategies should drive operating leverage and improve overall net earnings as higher utilization of production assets brings costs down and stabilizes cash flows.

Kaldvik Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Kaldvik's revenue will grow by 30.4% annually over the next 3 years.
• Analysts assume that profit margins will increase from -37.9% today to 23.0% in 3 years time.
• Analysts expect earnings to reach €60.5 million (and earnings per share of €0.27) by about September 2028, up from €-45.0 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 8.8x on those 2028 earnings, up from -3.8x today. This future PE is lower than the current PE for the NO Food industry at 24.2x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.23%, as per the Simply Wall St company report.

Kaldvik Future Earnings Per Share Growth

Risks

• The company experienced negative EBIT (EUR -4.3 million in Q2 2025) and elevated operational costs due to low production volumes, underutilization of capacity, and a difficult market environment, indicating ongoing risks to net margins and earnings if these challenges persist or recur.
  
• Kaldvik has had to lower its full year harvest guidance from 21,500 tonnes to 18,000 tonnes for 2025, primarily because of biological setbacks with the 2023 generation (higher mortality, reduced growth, and higher downgrading), which directly threatens future revenue growth and stability.
  
• Future expansion to reach higher production capacity (up to 45,000 tonnes) is contingent on yet-to-be-defined significant capital investment, which may increase the company's debt load or dilute current shareholders, potentially straining net margins and earnings if not carefully managed.
  
• Ongoing minority shareholder unrest, including formal requests for investigation into recent acquisitions and transactions, creates corporate governance uncertainty and could destabilize investor confidence, impacting share valuation and potentially increasing costs related to legal or regulatory proceedings.
  
• Kaldvik operates in a challenging competitive environment marked by increased global salmon production (noted supply growth of 8.5% in 2025) in major markets like Norway and Chile, potentially sustaining downward pressure on market prices and limiting the company's ability to grow revenues or improve margins.

Valuation

• The analysts have a consensus price target of NOK25.0 for Kaldvik based on their expectations of its future earnings growth, profit margins and other risk factors.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €263.4 million, earnings will come to €60.5 million, and it would be trading on a PE ratio of 8.8x, assuming you use a discount rate of 7.2%.
  
• Given the current share price of NOK12.0, the analyst price target of NOK25.0 is 52.0% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.