"All in all, the Group's second quarter results are good, and most business areas have reported growth. At the same time, we are not satisfied with Orkla Foods' results this time. Wide-ranging programmes have therefore been implemented with the aim of returning the company during 2008 to the level of profitability it has achieved in the past," says Group President and CEO Dag J. Opedal.
Orkla Branded Consumer Goods (Orkla Foods and Orkla Brands) has reported continuous, very good profit growth over a period of five years. The weaker results for Orkla Foods are largely due to higher raw material prices, combined with challenges for operations in Eastern Europe, particularly in Poland, and for Bakers in Norway.
The agreement to merge Sapa's and Alcoa's aluminium profile operations was closed in the second quarter. Including this joint venture Sapa will have annual sales of over NOK 30 billion and 15,000 employees. Amalgamating the two big organisations will be a demanding process, and both increased investments and costs of a non-recurring nature must be expected in the second half of 2007.
More than doubled EBITDA for the Renewable Energy Corporation (REC) and continued strong revenue growth for Jotun (+25 per cent) resulted in a high contribution to profit by associates (NOK 294 million compared with NOK -22 million last year).
Group operating profit before amortisation in the first half of 2007 amounted to NOK 2.7 billion (NOK 2.2 billion) , while pre-tax profit increased to NOK 6.6 billion (NOK 4.1 billion). Half-year operating revenues rose to NOK 27.9 billion (NOK 25.5 billion)
The return on Orkla's Share Portfolio for the first half of 2007 was 16.7 per cent. The market value of the portfolio is now NOK 20 billion.
1)Figures in brackets refer to the corresponding period of the previous year.
Date: 9 August 2007
Ole Kristian Lunde
SVP, Corporate Communications
Tel.: +47 22 54 44 31
SVP, Investor Relations
Tel.: +47 22 54 44 11