05/07/2019 | Press release | Distributed by Public on 05/07/2019 08:38
Orkla's operating profit (EBIT adj) rose by 14% to NOK 1,020 million in the first quarter of 2019. Operating revenues increased by 5% to NOK 10,176 million.
The Branded Consumer Goods business achieved a 10% improvement in operating profit and 0.9% organic sales growth. Orkla Foods had organic growth in most of its markets, while Orkla Confectionery & Snacks achieved improvement in Norway, Finland and Denmark. There was growth in Norway, in particular, due to the reversal of the sugar tax. Orkla Food Ingredients saw an early start to the ice cream season and delivered solid operating profit growth. Orkla Care posted operating profit on a par with last year, but top-line growth was weak.
'Orkla has had an encouraging first quarter, with improvement in operating profit and organic growth. We are now well under way with our new strategy period, and our short-term focus will be on improving operating margin. It is therefore gratifying to see that we are delivering margin improvement and growth in operating profit. We have also made several important acquisitions, including the purchase of the Finnish restaurant chain Kotipizza Group,' says Orkla President and CEO Peter A. Ruzicka.
Orkla Foods has signed an agreement to purchase Lecora, a Swedish manufacturer of frozen and chilled vegan and vegetarian dishes for the out-of-home market. Orkla Foods also completed its purchase of 43.5% of the shares in the Portuguese company Asteriscos e Reticências, S.A, which sells fermented tea-based health drinks under the Captain Kombucha brand. Orkla Food Ingredients has entered into an agreement to purchase a majority shareholding in the Greek company Stelios Kanakis Industrial and Commercial S.A., which is market leader for the sale and distribution of confectionery, bakery and ice cream ingredients. Orkla Food Ingredients also signed an agreement to purchase Zeelandia Sweden AB, a major supplier of margarine, vegetable oils and bakery ingredients.
Hydro Power increased its operating profit by 24% to NOK 73 million. The increase is chiefly due to higher power prices, year over year.
Orkla Financial Investments achieved operating profit of NOK 22 million, compared with NOK -5 million for the same quarter of last year. The improvement is mainly due to the inclusion of Kotipizza Group as of 1 February and the gain on Orkla Eiendom's delivery of housing units at Sofienlunden in Oslo.
Profit from associates rose by 92% to NOK 165 million. Jotun's operating profit rose by 44% in the first quarter. There was strong growth for Protective Coatings and a good performance by Decorative Paints. Sales in Marine Coatings are still affected by the cyclical downturn in the shipping industry, but have begun to pick up.
The Group's other income and expenses totalled NOK -119 million in the first quarter. The largest items were transaction costs related to the acquisition of Kotipizza Group, accounting effects related to the completion of the sale of the Russian snacks company Chaka, and costs related to the move to Orkla's new headquarters.
Orkla's operating profit before tax increased by 12% to NOK 990 million in the first quarter of 2019. Adjusted earnings per share rose by 21% to NOK 0.85.