Orkla’s operating profit (EBIT adj.) increased 26% to NOK 996 million in the second quarter of 2016.
The branded consumer goods business had an operating profit of NOK 982 million, representing a 20% improvement. Orkla has been strengthened by a number of acquisitions and internal improvement projects.
Orkla’s operating revenues increased by 22% in the second quarter, to NOK 9,433 million.
Organic turnover growth in the branded consumer goods business was 3.8%. All four business areas reported improvement in the quarter, both in operating revenues and in operating profit.
“For the ninth consecutive quarter we saw organic sales growth in the branded consumer goods business. Orkla had significant improvement in operating profit due to higher sales and internal improvement projects. In addition, demanding integration efforts are under way in the wake of several acquisitions. I am also very satisfied with developments in the aluminium company Sapa,” says Orkla President and CEO Peter A. Ruzicka.
Second-quarter profit from associates and joint ventures was NOK 442 million. Orkla’s share of Sapa’s profit after taxes amounted to NOK 319 million in the quarter, compared with NOK 7 million in the same period of 2015. The rise is attributable to improvement programmes and a shift in sales towards higher-value products. Jotun also contributed positively, with improvements in both sales and operating profit.
Hydro Power achieved an operating profit of NOK 53 million in the second quarter of 2016, as against NOK 27 million in the same period in 2015. Higher electricity prices were the main reason for the improvement.
Orkla’s profit before taxes came to NOK 1,259 million in the second quarter, compared with NOK 1,280 million in the corresponding period of 2015. Last year’s figure included a gain of NOK 425 million after a sale of shares in aluminium company Gränges.
During the first half of 2016, Orkla freed up about NOK 1.3 billion through the sale of shares and property. The funds will be used to invest further in the branded consumer goods business.
Orkla has strengthened its presence in several markets lately. With the acquisition of Hamé, Orkla Foods is now one of the largest food products suppliers in the Czech Republic, Slovakia and Romania. The acquisition of Cederroth has made Orkla Care one of the Nordic region’s leading branded consumer goods suppliers in the cleaning and personal care categories.
The acquisition of Harris makes Orkla House Care the leading provider of Do-It-Yourself painting tools in the UK. This agreement is contingent on approval by UK competition authorities. The acquisition of four strong textile brands in Finland has given Pierre Robert Group a good platform in the Finnish grocery sector. Orkla Food Ingredients has become an increasingly important supplier of ice cream ingredients in the UK, Germany, Netherlands and the Nordic countries as a result of a number of acquisitions.