Macro-economic indicators confirm the picture of a slight slowdown in the USA, while the outlook in Europe is somewhat more positive.  Inflation data also showed moderating price growth in most regions. 

Moderate growth is anticipated on the Nordic grocery market, but the larger proportion of private labels means that the market is still challenging in most categories. Outside the Nordic region profitability remains weak in certain Branded Consumer Goods companies. 

Energy prices in Norway are expected to remain high. At the end of September, the resource situation for Elkem, in the form of reservoirs, was generally somewhat weaker than normal for the time of year, but reservoir levels were better than the average in Norway. 

For Sapa, market prospects are still positive for profiles and building systems in Europe, even though growth may be lower than at the start of the year. In the USA, the market for profiles is expected to be relatively weak in the fourth quarter. Aluminium prices are expected to remain high in the fourth quarter. Although there has been a moderate rise in demand for Borregaard’s products at the start of the fourth quarter, the company still faces challenging operating parameters. 

Cost reduction and improvement projects that are being carried out in all parts of the Group are expected to make a positive contribution. 

Overall, the Nordic financial markets improved in the third quarter, although the Norwegian market declined slightly.

Oslo, 30 October 2006
The Board of Directors of Orkla ASA