Orkla fourth quarter in brief

Operating Revenue

EBITA*

Orkla's adjusted EBITA¹ came to NOK 998 million (NOK 1,206 million)² in the fourth quarter.

As expected, weak markets and a rapid decline in demand gave a poor result for Orkla Aluminium Solutions in the fourth quarter.

In Orkla Materials, the energy businesses had a high level of production and profit growth in the fourth quarter. This was offset by weaker markets near the end of the year for both the chemicals business in Borregaard and the silicon business in Elkem. Elkem Solar's factory has been mechanically completed and the start-up programme has begun.

Orkla has initiated strong measures to counteract the real effects of the financial crisis. Borregaard's cellulose plant in Switzerland has been closed down. In Orkla Aluminium Solutions, the production capacity has been significantly reduced and the workforce has been reduced by about 2,000 man-years in 2008, equivalent to a 15 % reduction. In addition, measures have been introduced to free up working capital and strict control of investments. As a result of these measures, write-downs and provisions for restructuring amounting to NOK 1,620 million were carried out in the fourth quarter.

The contribution from Orkla Associates to Group profit amounted to NOK 284 million in the fourth quarter compared with NOK 5 million last year. REC had an increase in EBITDA of 10 %, whereas demanding markets diminished growth for Jotun towards the end of 2008.

The weak trend in the stock markets continued in the fourth quarter, and the Share Portfolio had a return of -45.3 % (-46.0 % for the Morgan Stanley Nordic Index) in 2008. Substantial write-downs entail a loss on portfolio investments of NOK 3,537 million for the quarter.

After accounting write-downs and provisions for restructuring totalling NOK 4,839 million, the profit/loss before tax in the fourth quarter came to NOK -4,375 million (NOK 1,249 million)².

Initiated measures contributed to reduced working capital in the fourth quarter and cash flow from operating activities in the industrial operations amounted to NOK 1,246 million. The equity ratio at year-end was 47.7 %, while net gearing was 0.55.

Orkla entered into an agreement in the quarter with Alcoa, where Orkla acquires Alcoa's shares in Sapa Profiles in exchange for Orkla's stake in Elkem Aluminium. As a result of this agreement, Elkem Aluminium is reported as discontinued operations.

¹ Earnings before amortisation, write-down of inventory in Sapa Profiles, restructuring and significant impairments.

² Figures in parentheses are for the corresponding period in the previous year.

Print | << Navigate report >>