Orkla’s operating profit (EBIT adj.) increased in the first quarter of 2016 by 13%, to NOK 817 million.
Branded Consumer Goods continued to deliver improved results. Pre-tax profit rose by 57%, to NOK 1,251 million, also driven by better results from Sapa and Jotun.
Operating profit for Orkla’s branded consumer goods business totalled NOK 860 million in the quarter, an improvement of 12%. Adjusted for currency translation effects, it was an improvement of 7%.
Orkla’s operating revenues rose by 14%, to NOK 8,610 million. Branded Consumer Goods posted organic turnover growth of 1.8%, driven by Orkla Foods and Orkla Confectionery & Snacks.
“For the eighth consecutive quarter, we have succeeded in achieving organic turnover growth in markets where there is strong international competition. We have had several successful new launches, and are also seeing the effect of numerous internal improvement projects. We made a number of important acquisitions in the quarter that will strengthen our operations going forward,” says Orkla President and CEO Peter A. Ruzicka.
Orkla Foods will be one of the biggest food product suppliers in the Czech Republic, Slovakia and Romania, as a result of its acquisition of the food company Hamé. Through its purchase of O. Kavli A/S, Orkla Foods Danmark has strengthened its position in the Danish grocery market. Both agreements have now been approved by the relevant competition authorities.
Pierre Robert Group will be a leading supplier of socks, tights and underwear to the Finnish grocery sector following the purchase of four brands from Nanso Group in Finland. The acquisition of The Waverley Bakery Limited strengthens Orkla Food Ingredients’ position in the UK ice cream cone and accessories market.
Lower power prices and slightly lower volume had a negative impact on Hydro Power’s results, and first-quarter operating profit totalled NOK 44 million, compared with NOK 56 million in the corresponding period of 2015.
Profit from associates and joint ventures (primarily Sapa and Jotun) rose by 94%, to NOK 462 million in the first quarter. Orkla’s share of Sapa’s profit after tax amounted to NOK 209 million in the quarter, compared with NOK 45 million in the same period of 2015. Jotun continued to deliver a positive sales and profit performance. A gain of NOK 57 million was also realised in the first quarter in connection with the sale of a real estate property.
Diluted earnings per share increased by 74% in the first quarter, to NOK 1.08.