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Increase in Orkla’s operating profit

Orkla’s first-quarter EBITA amounted to NOK 704 million, compared to NOK 233 million in the same period of 2009.

Orkla Brands, Sapa, Elkem Silicon and Jotun (42.5 percent stake) all show profit growth in the first quarter of 2010 compared to last year. Operating revenues rose by 11% to NOK 14.9 billion due to improved market conditions for Sapa and Elkem Silicon.

“It is positive that the measures we have implemented in the past few years have strengthened our competitiveness. We expect Orkla Brands and Jotun (42.5 per cent) to continue to deliver a robust performance. Sapa, Elkem Silicon and Borregaard should be well positioned when markets normalise. Furthermore, the Group’s two solar energy investments (REC (39.7 percent stake) and Elkem Solar) are currently in a ramp-up phase, the results of which we expect to see in 2010/2011,” says President and CEO Dag J. Opedal.

Orkla Brands has recently acquired several businesses: Kalev (chocolate manufacturer in Estonia), Peterhof (chocolate spread in Russia) and Sonneveld (bakery ingredients in the Netherlands). In total, these companies generate sales of almost NOK 750 million. Elkem Solar has entered into an agreement with a leading solar energy company to deliver up to 1,000 tonnes of solar-grade silicon in 2010.

As long as the market price of REC shares is lower than the book value, the accounting value will be written up and down in step with market price fluctuations. For the first quarter, this meant an accounting charge of NOK 4.6 billion. As announced, Orkla will guarantee and participate in REC’s rights issue in proportion to its shareholding. Following the issue, Orkla’s average cost price per share will be NOK 33.99, while the book value at the end of the first quarter will be NOK 22.48 per share.

The Share Portfolio has had a satisfactory start to the year, generating a first-quarter return of 11.2 percent, compared to the 10.2 percent return on the Nordic index (MSCI Nordic). At quarter-end, the market value of Orkla’s Share Portfolio was NOK 11.7 billion. At quarter-end, Orkla’s equity-to-assets ratio was 52.9 percent, while its net interest-bearing liabilities, which totalled NOK 19.9 billion, were at the same level as at the end of 2009.

View photos of the first quarter presentation on Flickr.

1st Quarter 2010
Presentation of 1st Quarter
Quarterly and accounting figures 1 st Quarter 2010
Press release