Agribusiness · Aquaculture
Aquaculture Sector Primer
A 40-page primer plus Excel valuation model on salmon farmers: farming cost and EBIT per kg, licence capacity, biological risk and a year-by-year valuation.
2026 Edition · data as of June 2026
- pages
- 40
- sections
- 15
- model sheets
- 12
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The full primer
£25 / ~$32
- 40 pages, 15 sections
- Worked examples and applied cases
- 2026 Edition, data as of June 2026
Excel model
Valuation template
£45 / ~$58
- 12 sheets (.xlsx)
- Runs the primer's worked valuations live
PDF + Excel model Best value
Both files together
£59 / ~$76
- The 40-page primer
- The 12-sheet Excel model
- £70 bought separately · £11 less
Complete Agribusiness Library
All three Agribusiness industries: three primers, three Excel models (Fertilisers, Ag Processing & Trading, and Aquaculture).
Inside the primer
The 15-section contents, a worked valuation page, and the Excel dashboard.
Contents
- 01 How Salmon Farmers Make Money
- 02 Company Types in Listed Aquaculture
- 03 The Salmon Production Lifecycle
- 04 Segments, Origins and Salmon Prices
- 05 Revenue Drivers and a Generic Worked Example
- 06 Cost Structure: Farming Cost per kg
- 07 Valuation Frameworks: EV/kg and Pure-Farming EV
- 08 Worked Example: Mid-Cycle EBIT Valuation Walk-Through
- 09 Applied Cases: Six Listed Case Studies
- 10 Biological Risk: Lice, Mortality and Regulation
- 11 Licence Capacity and MAB Constraints
- 12 Key Metrics and Screening
- 13 Risk Factors and Red Flags
- 14 Benchmarks and Comparative Case Study
- 15 Glossary and Quick Reference
Worked examples and applied cases · 40 pages · 15 sections · 3 farm engines
The Excel model
Educational material for professional use. This primer and its model are not investment advice or a recommendation to buy or sell any security, and they are not personalised. Worked valuations use illustrative calibrations, not fair-value estimates for any company.
A salmon farmer raises fish over two to three years, the last year or more of it in sea pens, and sells them at whatever the market pays on the day of harvest. Its costs, mostly feed, are committed long before that price is known, so the margin per kilo swings hard with the salmon price and with biology: sea lice, disease and mortality raise costs and cut volume. Growth is capped by licences that limit the weight of fish a farmer may hold in the sea. The work is to rebuild earnings per kilo at a long-run price and cost, then value the licensed capacity on the cash it produces.
Salmon farming valuation benchmarks by origin
Where a farmer grows its fish sets its licence rules and its biology, so the primer reads margin per kilo origin by origin. The measure is operational EBIT per kg: the margin farmers report once fair-value marks on live fish are stripped out. These are the primer's illustrative bands.
| Origin | Licence regime | Operational EBIT per kg | What moves it |
|---|---|---|---|
| Norway | Maximum allowed biomass, adjusted up or down 6% by a traffic-light system | NOK 6-20/kg | A wide spread between regions; sea lice decide the traffic-light colour |
| Faroe Islands | 12-year licences; fish numbers approved each cycle | DKK 4-8/kg | A strong biology record |
| Scotland | UK regime | Can be negative | Disease and mortality incidents |
| Chile and Canada | Warmer water, a different cost curve | Typically below Norway | Water temperature and logistics |
Across origins, above NOK 15/kg is strong, NOK 5-15/kg mid-cycle and below NOK 5/kg stressed. Norway taxes farming profit at 47%, a 25% resource-rent tax on top of 22% corporate tax, so a multiple of 12x pre-tax profit set before 2023 is about 22.6x after-tax profit today. Enterprise value per kg of harvest has no fixed band: it carries licence scarcity and the salmon price the market expects, so the primer sets a model figure beside the market's. Leverage is read on operating profit, from net cash to 2.0x as normal and stretched above 2.5x.
Worked example: a salmon farming DCF
Take a hypothetical low-cost Norwegian farmer harvesting 200,000 tonnes a year, inside a licence ceiling of 270,000 tonnes. Farming cost is NOK 56/kg including NOK 5 of depreciation, and salmon is priced at a conservative long-run NOK 68/kg. The primer discounts six licence-capped years at an 8.26% WACC and adds a terminal value at 2% growth.
| Step | Amount |
|---|---|
| Operational EBIT per kg (NOK 68 less NOK 56) | NOK 12/kg |
| Mid-cycle EBIT (200,000 t at NOK 12/kg) | NOK 2,400m |
| Free cash flow after 47% tax (maintenance capex equals depreciation) | NOK 1,272m |
| PV of years 1-6 at 8.26% | NOK 5,834m |
| PV of terminal value (2% growth) | NOK 11,886m |
| DCF enterprise value | NOK 17,720m |
| Less net debt | -NOK 4,000m |
| Equity value | NOK 13,720m |
| Value per share (250m shares) | NOK 54.9 |
A 12x multiple on the same operating profit gives 99.2 kroner per share, nearly double. The primer splits that gap. NOK 35.3 is the resource-rent tax, which the multiple does not see. The other NOK 9.0 is the multiple paying for 3.7% growth a year for ever while licences hold harvest flat. Then comes the stress test: one year at NOK 52/kg, with NOK 3/kg of extra mortality cost and a 6% cut in biomass, turns operating profit into a loss of NOK 1,316m. Net debt rises to 2.2x mid-cycle operating profit.
The primer runs the same method on a high-cost regional farmer and a farm you set up yourself, with a grid of salmon price against farming cost. The Excel model values all three on your own inputs.
Which salmon farming valuation method fits which company
| Company type | Primary method | Check with | Why |
|---|---|---|---|
| Global multi-origin farmer | After-tax DCF, origin by origin | Operational EBIT per kg by origin; EV per kg | A weak origin can hide inside a respectable group average |
| Large Norwegian farmer | After-tax DCF on licence-capped tonnes | Licence cover; EV/EBIT; EV per kg | Licences cap the tonnes, and Norwegian profit is taxed at 47% |
| Regional pure play | After-tax DCF | Farming cost per kg where filed; net cash or debt | All its biology risk sits in one production area |
| Farmer split across jurisdictions | DCF for each origin, with its own margin and tax | Operational EBIT per kg by region | A loss-making region drags the group figure |
| Holding company | Sum-of-the-parts | Farming stake at farming EBIT per kg | Fishing and fishmeal earn on a different cycle from salmon |
What the full primer adds
The primer builds from how farmers make money and what a kilo costs to grow, through valuation, to the worked chapter that values hypothetical farmers from first input to equity value. Applied cases on six listed farmers, biological risk, licence capacity and the red flags follow.
Free guides cover the individual pieces: salmon farming cost per kg, profit per kg by country, operational against reported EBIT, salmon prices and the cycle, EV per kg, lice, mortality and regulation and licence capacity. Research profiles for Mowi, SalMar, Lerøy, Bakkafrost, Grieg Seafood and Austevoll apply the same method to filed results.
The companion Excel model spans twelve sheets. It values a low-cost scale farmer, a high-cost regional farmer and a farm you set up yourself year by year on an after-tax DCF, with EV per kg and an EBIT multiple as cross-checks. Harvest is capped at the licence ceiling. Norway's 25% resource-rent tax on salmon farming profit applies only to the share earned in Norway, and net debt and minority interests come off to reach equity. The other sheets hold a valuation summary, an EBIT-per-kg and cost-stack view, capacity against EV per kg, a cycle and biological downturn scenario, and a live sensitivity grid.
Sheets: Quick Start, Instructions, Assumptions, Low-Cost Scale, High-Cost Regional, User Farm, Valuation Summary, EBIT-kg & Cost Stack, Capacity & EV-per-kg, Cycle & Biological Downturn, Sensitivity, Dashboard.
Salmon farming valuation: free guides
Salmon farming valuation FAQ
- How do you value a salmon farming company?
- On the after-tax cash its licensed tonnes produce. Take operational EBIT per kg at a long-run salmon price, multiply by harvest capped at the licence ceiling, tax Norwegian farming profit at 47%, add back depreciation and deduct maintenance capex and any biomass working capital, then discount. The primer uses NOK 68/kg and an 8.26% WACC, with an EV/EBIT multiple and EV per kg as cross-checks. A holding company with fishing and fishmeal assets needs a sum-of-the-parts instead.
- What is a good EBIT per kg for a salmon farmer?
- The primer's teaching bands, in NOK equivalent: above NOK 15/kg is strong, NOK 5-15/kg is mid-cycle and below NOK 5/kg is stressed. Compare only on a matched perimeter. A farming-only figure leaves out the processing and sales margin a value-chain figure includes, and the harvest tonnes behind each figure must be on the same basis.
- What is a normal EV per kg for salmon farmers?
- There is no fixed band. The market's EV per kg carries two things a DCF at a long-run price does not: the scarcity of licences, which cannot be bought outside regulated growth rounds, and the salmon price the market expects. It runs high when prices run high. Build a model EV per kg at a stated long-run price and set it beside the market's figure.
- How does Norway's resource-rent tax change salmon farming valuations?
- Since 1 January 2023 Norway has taxed salmon farming profit at 25% on top of 22% corporate tax, a 47% marginal rate on the Norwegian share of profit. A multiple set before 2023 assumed 22%; at 47%, 12x pre-tax EBIT is about 22.6x after-tax EBIT. In the primer's low-cost worked example the tax explains NOK 35.3 of the NOK 44.3 per share gap between the DCF and a 12x multiple.
- What discount rate is used to value salmon farmers?
- The primer builds an 8.26% WACC. A 4.50% risk-free rate plus a 1.10 beta on a 4.23% equity risk premium gives a 9.15% cost of equity; debt costs 6.00% before tax and 4.68% after 22% corporate tax, at a 20% weight. For a NOK-only view, swap in the Norwegian 10-year government yield.
See this methodology applied to a real company:
Mowi (MOWI) →