Orkla's operating profit (EBIT adj.) increased by 18% to NOK 789 million in the second quarter of 2015. The Branded Consumer Goods business posted operating profit of NOK 820 million, an improvement of 11% from the second quarter of 2014.
The progress made by Branded Consumer Goods is ascribable to increased sales due to several major innovation projects and the positive effects of cost improvements throughout the value chain.
Orkla's second-quarter operating revenues increased to NOK 7,705 million, up from NOK 7,196 million in the same period in 2014. Branded Consumer Goods achieved organic turnover growth of 0.2%, but adjusted for Easter effects, growth was around 2.7%. The Orkla Foods, Orkla Confectionery & Snacks and Orkla Food Ingredients (OFI) business areas all showed improvement. Sales were particularly good in the Norwegian companies towards the end of the quarter.
"All in all, I am pleased with the second quarter. Despite demanding markets, we have delivered organic growth for the fifth quarter in a row. We continue to focus on operations. Extensive efforts have been concentrated on improvement projects and a variety of cost-reducing measures," says Orkla President and CEO Peter A. Ruzicka.
In the second quarter, Orkla Foods entered into an agreement to purchase the Swedish company Anamma Food, which manufactures frozen vegan dishes. Orkla Foods also announced the purchase of the Austrian company Bioquelle. The company holds strong positions in Austria in categories such as muesli, nuts, dried fruit, health food and organic food, in addition to distributing soy-based products. OFI has completed its acquisition of the German sales and distribution company Eisunion, a leading supplier of ice cream ingredients.
Profit from associates and joint ventures (mainly Sapa, Jotun and Gränges) amounted to NOK 545 million in the second quarter, compared with NOK 192 million in the same quarter of 2014. This improvement is primarily due to the sell-off of shares in the aluminium company Gränges, whereby Orkla sold 15% of its shares at a gain of NOK 425 million. Orkla still has a 16% equity interest in Gränges. Jotun continued to make progress, delivering good growth in turnover and profit. Sapa also achieved marked improvement in underlying operating profit.
Hydro Power had operating profit of NOK 27 million in the second quarter of 2015, compared with NOK 39 million in the same period of 2014. Orkla Eiendom posted operating profit of NOK 57 million in the quarter, compared with a break-even result in the same quarter of 2014. The improvement is chiefly ascribable to the sale of sites from Borregaard's former industrial operations in Switzerland.
Orkla's profit before tax increased by 45% to NOK 1,280 million in the second quarter. Diluted earnings per share rose 54% to NOK 1.09 in the quarter.
Oslo, 17 July 2015
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