Continued improvement for Orkla
Orkla’s operating profit (EBIT adj.) increased by 13% to a total of NOK 993 million in the third quarter of 2015.
Branded Consumer Goods posted operating profit of NOK 1,055 million, which was a 15% improvement from the third quarter of 2014.
Orkla’s operating revenues rose 15% to NOK 8,381 million in the third quarter. The increase is ascribable to organic growth, contributions from acquisitions and currency translation effects. Branded Consumer Goods achieved organic growth of 2.3%. The Orkla Foods, Orkla Confectionery & Snacks and Orkla Food Ingredients (OFI) business areas all delivered improved results, while Orkla Home & Personal saw a weak decline.
“For the sixth quarter in a row, Orkla delivered organic growth in challenging markets. A number of successful new products were launched and extensive cost improvements were made in every part of the value chain. Due to the weak exchange rate of the Norwegian krone, purchasing costs increased for the Norwegian businesses. In this quarter, too, considerable efforts were focused on improvement projects and various cost reduction measures,” says Orkla President and CEO Peter A. Ruzicka.
The competition authorities have approved the acquisition of the Swedish branded consumer goods company Cederroth, subject to the sale of the Asan and Allévo brands. The process of integrating Cederroth into Orkla Home & Personal is well under way. In the third quarter, Orkla signed an agreement to purchase the Norwegian confectionery company Lakrisgutta. To strengthen its competitiveness in Latvia, Orkla has grouped its branded consumer goods operations into fewer, more effective units.
Profit from associates and joint ventures (primarily Sapa and Jotun) amounted to NOK 239 million in the third quarter, up from NOK 126 million in the same quarter of 2014. Jotun continued to report improved results, delivering good growth in turnover and profit in all regions and segments. In addition, the company benefited from positive currency translation effects. Sapa also achieved substantial improvement in underlying operating profit, driven by positive contributions from synergy programmes, strong demand in North America and positive currency effects.
Hydro Power posted operating profit of NOK 22 million in the third quarter of 2015, compared with NOK 46 million in the same period of 2014. The decline is due to significantly lower power prices. Financial Investments reported operating profit of NOK 14 million in the quarter, compared with NOK -5 million in the same quarter of 2014.
Orkla’s operating profit before tax increased by 18%, amounting to NOK 1,069 million in the third quarter. Diluted earnings per share rose by 57% to NOK 0.80 in the quarter.