Orkla: Stable performance
Orkla's operating profit (EBITA) amounted to NOK 992 million in the second quarter, compared with NOK 1,079 million in the corresponding period of 2011. The timing of Easter sales and weak markets for Sapa Profiles Europe impacted negatively on second-quarter profit. Operating profit totalled NOK 1,880 million in the first half of 2012, which is a slight improvement.
Orkla's operating revenues amounted to NOK 15,145 million in the second quarter, compared with NOK 15,897 million in the corresponding period of 2011.
Taking into account the timing of Easter sales, the Branded Consumer Goods area posted operating profit on a par with last year. Sales volumes improved in the Nordic grocery market, and overall market shares were maintained. The Branded Consumer Goods area accounted for around 60% of Orkla's profit.
"Orkla is in a transitional phase towards becoming a pure branded consumer goods company. The new Group executive management possesses strong branded goods expertise. This will ensure that we maintain focus on operational excellence and organic growth, while we carry out structural changes. The acquisition of Jordan is entirely in line with our strategy of expansion in the branded consumer goods area," says President and CEO Åge Korsvold.
Stabburet in Norway, the Chips Group in the Nordic region and the Baltic businesses reported a positive sales and profit performance in the second quarter. MTR in India achieved 23% growth in sales in the second quarter. Orkla Brands Russia saw moderate sales improvement. To increase the competitiveness of the Russian operations, the number of factories will be reduced from four to three.
Weak markets brought a decline in volumes for Sapa Profiles Europe in the second quarter. Sapa Profiles North America continued to achieve improved volumes and profitability. Sapa Heat Transfer strengthened its performance in the second quarter, following the implementation of improvement measures. Borregaard Chemicals continued to deliver strong results in the second quarter. Lower power prices contributed to weak results for Hydro Power.
In accordance with Orkla's accounting practice, the investment in REC was written down to market value at quarter end. Orkla's profit before tax amounted to NOK 2.1 billion in the first half of 2012. The sell-off of the share portfolio is proceeding as planned. In the first half of 2012, net sales of shares totalled just over NOK 2 billion.
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