Profitable growth at Orkla

Orkla's pre-tax profit in the first quarter totalled NOK 1.7 billion, up from NOK 1.0 billion in the same period last year. Underlying growth for the Branded Consumer Goods business was satisfactory. Elkem improved its performance compared with the fourth quarter of 2004, but operating profit was weaker than in the first quarter of 2004.

The dynamic period the Orkla Group is currently in the midst of, which entails major structural changes, continued in the first quarter. The sale of Orkla's interest in Carlsberg prepared the ground for several major acquisitions. Elkem/Sapa and the Russian company SladCo have been consolidated in the Group accounts since the beginning of this year, while Chips was consolidated from 1 March.
 
Both operating revenues and operating profit[1] are now higher than in the "Carlsberg period". With the newly acquired companies, Orkla's pro forma annual revenues in 2004 were around the NOK 56 billion mark, compared with NOK 45 billion in 2003, while operating profit1 was about NOK 4.8 billion, compared with NOK 3.8 billion the previous year.
 
"Orkla has undergone major structural changes in the past year, and not least in the last quarter. The establishment of the new business area Speciality Materials opens up new possibilities, and we will now be looking more closely at the potential for coordination and growth in this entire area," says Acting Group President and CEO Dag J. Opedal.
 
The return on the investment portfolio was 8.4 per cent in the first quarter. Orkla's interest in Elkem has been transferred from Financial Investments to the Industry division, and the market value of the portfolio now stands at NOK 14.5 billion.
 
Orkla's first quarter operating revenues totalled NOK 13.3 billion, a slight decline of NOK 242 million compared with the same period last year[2]. Easter effects had a negative impact in the Branded Consumer Goods area, while Borregaard's sales were lower due to restructuring and the sale of non-core businesses.
 
ENCLOSURES:
- Group INCOME statement
- Group balance sheet
- Results by business area


[1] Before goodwill amortisation and other revenues and expenses
[2] Pro forma 2004