Atlantic Sapphire's emergency harvest of 200,000 salmon at its Miami facility on July 28, highlights the operational risks involved in land-based salmon farming ventures, seafood analysts told IntraFish.
"This once again shows the operational risk in land-based farming and every time you get such an incident you will get a risk premium," DNB Markets analyst Alexander Aukner told IntraFish.
The Oslo-listed salmon farmer on Wednesday began urgently harvesting 200,000 fish from one of its growout systems at its Miami farm because nearby disruptive construction work stressed the fish and caused an unspecified number of salmon mortalities.
The incident does not shake Aukner's faith in the company but shows that it is "still difficult to get the systems up and running," he said.
Kepler Cheuvreux analyst Christian Nordby said the loss of fish does not mean much but "creates uncertainty about how things will go with a company that, in practice, will expand for another 10 years."
Atlantic Sapphire's share price fell about 7.32 percent to NOK 114 (€10.70/$12.60) as the Oslo Exchange opened for trading July 29 in reaction to the incident.
"The fall in value is much, much more than the salmon is worth, but it's about risk," Nordby told IntraFish.
"Almost all value in the company is from 2030 onwards, as only a small increase in the risk premium will lead to a sharp fall in price."
Nordby emphasized the risk in Atlantic Sapphire is much higher compared with a conventional salmon farming company.
"This is something investors also know," Norby said. "It is a new industry and one must endure that there will be a number of challenges."
Prior to today's announcement, Kepler Cheuvreux had a "BUY" recommendation on the Atlantic Sapphire stock.