Weaker operating profit for Orkla
(Thomson Reuters ONE) -
Orkla's operating profit (EBITA) amounted to NOK 632 million in the second
quarter, compared with NOK 698 million in the corresponding period of 2012. June
was a weak sales month for the Nordic branded consumer goods companies. The
Russian market still presents major challenges.
"Our operating profit is not satisfactory. We face tough competition from
multinational companies and the chains' private labels. Both the change
processes that we are implementing and the integration of Rieber & Søn have
required substantial internal resources and attention. We are now ready to
reinforce our market plans and initiate assertive marketing activities," says
Orkla President and CEO Åge Korsvold.
Orkla's operating revenues totalled NOK 7,905 million in the second quarter,
compared with NOK 7,213 million in the same period of 2012. The increase is
ascribable to the acquired businesses in Rieber & Søn and Jordan. Orkla's profit
before tax was NOK 514 million in the second quarter, compared with NOK 938
million in the same period of 2012.
The Branded Consumer Goods business
Operating profit for Orkla Foods amounted to NOK 263 million, compared with NOK
262 million in the corresponding period of 2012. Profit for Rieber & Søn was
substantially lower than in the corresponding period of last year. Stabburet
posted lower profit compared with a good second quarter in 2012. Profit improved
in Sweden, Denmark, Finland and the Baltics. Since the competition authorities
approved the acquisition of Rieber & Søn in April, a comprehensive integration
process has been implemented. Rieber & Søn Norge and Stabburet are to become one
of Norway's leading food companies. Frödinge will become part of the leading
Swedish food company formed by newly merged Procordia and Abba Seafood. Rieber &
Søn Danmark and Beauvais foods will become a strong Danish branded consumer
goods company.
Orkla Confectionery & Snacks reported operating profit of NOK 119 million in the
second quarter, compared with NOK 151 million in the same period of 2012. The
competitive situation is challenging. Major organisational changes have been
carried out. A single company is being established in each country, with a view
to strengthening collaboration and integration across the
chocolate/confectionery, snacks and biscuits categories.
Orkla Home & Personal had a satisfactory quarter and posted operating profit of
NOK 165 million, up from NOK 131 million in the same period of 2012. The profit
improvement is ascribable to Lilleborg (Norway) and Axellus, and to
contributions from Jordan House Care. The integration of Jordan Personal & Home
Care in Lilleborg is proceeding as planned.
Orkla International posted an operating loss of NOK -40 million, compared with
NOK -15 million in the second quarter of 2012. Orkla Brands Russia saw a decline
in sales in a difficult Russian chocolate market. Further write-downs and
provisions totalling NOK 435 million have been made in connection with the
Russian operations. The Rieber & Søn companies Vitana (Czech Republic), Rieber
Polska and Rieber Russia became part of Orkla International in May 2012.
Orkla Food Ingredients (OFI) reported satisfactory operating profit of NOK 77
million in the second quarter, compared with NOK 68 million in the same quarter
of 2012. This improvement is attributable to acquired businesses and increased
sales of bakery ingredients in Norway and Denmark. OFI's ice cream ingredients
business delivered a good performance.
Other businesses
Sapa Heat Transfer posted second-quarter operating profit of NOK 84 million,
compared with NOK 102 million in the same period of 2012. The factory in
Finspång (Sweden) is still not operating at its targeted productivity level, in
addition to which profit has been negatively affected by the strong Swedish
krone. The trend on the European automotive market was negative, while the North
American market was on a par with last year. Growth in the Chinese automotive
market accelerated. Orkla has engaged in exclusive negotiations with a potential
buyer for Sapa Heat Transfer, but the parties have now agreed to terminate these
negotiations.
Hydro Power posted operating profit of NOK 77 million, compared with NOK 46
million in the second quarter of 2012. Jotun, in which Orkla holds a 42.5%
ownership interest, strengthened its results.
Orkla's remaining shares in Borregaard and REC have now been sold. Share
disposals totalled
NOK 2.1 billion. As at 30 June 2013, the market value of Orkla's shares and
financial assets was NOK 1.1 billion.
Discontinued operations
Orkla has concluded an agreement with Norsk Hydro to form a company that will be
a globally leading supplier of aluminium solutions. The European and US
competition authorities have approved the joint venture, but a reply is still
awaited from the Chinese competition authorities. Operating profit from
discontinued operations amounted to NOK 163 million in the second quarter and is
entirely related to Sapa's extrusion and building system business, which is to
be part of the future joint venture with Norsk Hydro. Sapa's extrusion and
building system business is achieving profit growth in North America, while
markets in Europe remain weak. Goodwill was written down by NOK 1,161 million.
The write-down does not affect the agreement with Norsk Hydro.
Orkla ASA
Oslo, 18 July 2013
Ref.:
EVP Corporate Communications and Corporate Affairs
Håkon Mageli
Tel: +47 928 45 828
SVP Investor Relations
Rune Helland
Tel: +47 22 54 44 11 / +47 977 13 250
An Excel file with key figures is available at www.orkla.com
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Presentation of 2nd Quarter 2013:
http://hugin.info/111/R/1717211/570908.pdf
2nd Quarter 2013:
http://hugin.info/111/R/1717211/570926.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Orkla ASA via Thomson Reuters ONE
[HUG#1717211]
Unternehmensinformation / Kurzprofil:
Datum: 18.07.2013 - 06:59 Uhr
Sprache: Deutsch
News-ID 279490
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contact information:
Town:
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Kategorie:
Business News
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