Síldarvinnslan hf. – Valuation as of 1 Jan 2025

Key assumptions

• Sales amount to USD 367 million in 2025, increasing by 13% from the previous year and thereafter by 3% per year over the forecast period, or in line with changes in the consumer price index.
• Gross margin from sales is 57% annually over the forecast period.
• Operating assets depreciate by 9% per year over the forecast period.
• Average cost of interest-bearing debt is 5.6% per year during the forecast period; financing is mainly in USD and EUR.
• Return on the book value of equity holdings in associates is 10% per year for the first five years of the forecast period, and then 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 during the forecast period and is calculated on profit after deducting results from associates and the 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 is based on maintaining their real value over the forecast period.
• No purchases of fishing quotas are assumed during the forecast period.
• The strong cash position at year-end 2024 is used for loan repayments.
• Dividend payments average 92.1% of comprehensive income from the previous year during the forecast period; the equity ratio is 55.7% at the end of the period.
• Terminal growth rate at the end of the forecast period is 3%, i.e., 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 78.5 as of 1 January 2025 (USD 1 = ISK 138).