Orkla reports Q2 operating profit of NOK1.12B, up 9% from year-ago period, as operating revenues rise 3% to NOK10.02B.

Orkla’s operating profit (EBIT adj.) increased by 9% in the second quarter to NOK 1,119 million. Orkla’s operating revenues rose 3% in the second quarter, to NOK 10,017 million.

Branded Consumer Goods posted 2% turnover growth. Organic turnover growth in the period was 0.5%, adjusted for the loss of a distribution agreement within Orkla Confectionery & Snacks. Orkla continued to achieve good growth in Finland and Central Europe. Orkla Food Ingredients made fine progress in the second quarter due to higher sales of ice cream ingredients.

Sales growth in Norway was weaker than last year, partly as a result of the 83% increase in tax on chocolate and sugar. Several of Orkla’s categories have seen lower campaign activity and higher retail prices, which have impacted negatively on volume growth.

“Our priority is to turn performance around in Norway, and to continue our efforts to shift our portfolio towards higher growing categories, sales channels and geographies. We maintain steady focus on improving our supply chain efficiency, and in the second quarter decided to close two factories in Sweden and Finland. We will make continuous improvements in production and procurement. Effective 1 October, Orkla will be making changes in its Group Executive Board. The aim is to strengthen the Group’s strategic priorities and utilise our executive management team in the best possible way,” says Orkla President and CEO Peter A. Ruzicka.

Profit from associates amounted to NOK 105 million in the second quarter, and was largely attributable to Jotun. While Jotun has seen improved sales in the past few months, the market situation for Marine Coatings remains challenging. Hydro Power achieved operating profit of NOK 97 million in the second quarter, an improvement of 23% from the corresponding period of 2017. The increase is mainly due to higher power prices, while production volume declined.

Orkla’s profit before tax increased by 13% to NOK 1,091 million in the second quarter. Earnings per share for continuing operations rose 9% to NOK 0.82.

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