Orkla's operating profit (EBITA) totalled NOK 736 million in the first quarter of 2014. This was an improvement of 23% from the corresponding quarter of 2013. Orkla's operating revenues were NOK 8,306 million, up from NOK 7,219 million in the same period of last year.
Operating profit for Orkla's branded consumer goods business increased by 13% to NOK 655 million in the quarter.
Orkla Foods realised substantial cost synergies as a result of the integration of Rieber & Søn, while Orkla Confectionery & Snacks reported a fall in operating profit in the quarter. Orkla Home & Personal and Orkla Food Ingredients achieved improved results. Although Orkla Brands Russia continued to post a negative operating result, the other businesses contributed to profit improvement for Orkla International.
Orkla's branded consumer goods business had a turnover of NOK 6,970 million, equivalent to a rise of 17%. This growth is ascribable to acquisitions and favourable currency translation effects.
"Seen in isolation, I am pleased with the improvement in profit this quarter, but our biggest challenge is to create organic growth in sales. A number of initiatives will contribute towards achieving this objective. We will focus on fewer, but bigger innovations, and direct more resources and marketing towards our strongest brands. In time, we will see the results of these systematic efforts," says Orkla President and CEO Peter A. Ruzicka.
The aluminium company Gränges reported operating profit of NOK 117 million, up from NOK 85 million in the corresponding period of last year. This improvement is due to higher volumes and the effects of improvement programmes. Orkla's Board of Directors has decided to explore the possibilities of undertaking an IPO of Gränges on NASDAQ OMX Stockholm.
Hydro Power posted operating profit of NOK 58 million, compared with a loss of NOK 3 million in the first quarter of 2013. Significantly higher volume due to heavy precipitation at the start of the year more than offset lower power prices.
Operating profit for Sapa increased in the first quarter compared with the first quarter of 2013. Sapa's announced restructuring processes are on track, and Sapa's net contribution to profit was affected by costs related to these processes. Demand for extruded aluminium products rose by 5%, year over year, in North America. There was corresponding growth of 2% in Europe.
Jotun achieved satisfactory results for the first quarter of 2014. All segments in Jotun reported growth in sales.
Orkla's profit before tax amounted to NOK 639 million, compared with NOK 900 million in the same period of 2013.
Oslo, 8 May 2014
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