Ísfélagið hf. – Valutaion as of 1 Jan 2025

Key assumptions

• Operating revenue amounts to USD 202 million in 2025, representing an 18% increase from the previous year, followed by 3% annual growth over the forecast period, in line with changes in the consumer price index.
• Gross margin averages 36% per year over the forecast period, reflecting plans for an increase in the fishing levy.
• Operating expenses amount to 6.5% of operating revenue per year over the forecast period.
• Operating assets depreciate by 10% per year during the forecast period.
• Average cost of debt is 5.6% per year during the forecast period, with financing mostly in USD and EUR.
• The return on the book value of equity holdings in subsidiaries and associates is assumed to be 10% per year for the first five years of the forecast period, and 12% per year thereafter.
• Booked fishing quotas at the beginning of the forecast period are revalued annually through comprehensive income in line with the increase in the consumer price index. This is a deviation from the company’s current accounting practices.
• Income tax payable amounts to 20% per year over the forecast period and is calculated on profit excluding results from subsidiaries and associates and revaluation of fishing quotas. The revaluation of fishing quotas is recorded net of income tax, which is recognized as a tax liability.
• Investment in operating assets assumes maintenance of their real value during the forecast period.
• No purchases of fishing quotas are assumed during the forecast period.
• Dividend payments amount to 129.1% of total comprehensive income of the previous year in 2025, and 95% per year thereafter over the forecast period. The equity ratio is 61% at the end of the forecast period.
• Terminal growth rate at the end of the forecast period is 3.0%, implying no real growth.
• See other general assumptions under “Valuation.”
• A nominal required return on equity of 10% is assumed when discounting the forecasted results for 2025–2034.

Results

• Based on the above assumptions, the estimated share value is ISK 125.8 as of 1 January 2025 (USD 1 = ISK 138).