Solid quarter in challenging operating conditions
Orkla's second-quarter operating profit (EBITA)* ended at NOK 1,230
million, compared with NOK 1,194 million for the same quarter of
2007. Orkla Brands continued its positive profit trend, and Sapa
delivered satisfactory profit despite declining volumes. The Share
Portfolio outperformed the Nordic index, but delivered a negative
return in a weak financial market.
"We are satisfied with our profitability performance in the second
quarter, and the Industry division reported good overall results.
However, we expect future market conditions to remain challenging,"
says President and CEO Dag J. Opedal.
Orkla's second-quarter operating revenues totalled NOK 17.6 billion,
up from NOK 14.0 billion in 2007. A substantial part of the increase
in the operating revenues (but also a lower operating margin) is
ascribable to the merged aluminium profile business (Sapa/Alcoa).
Orkla Brands, Sapa and Borregaard all posted satisfactory
performances. Both Elkem Solar's construction project and the
integration of Sapa's and Alcoa's profile businesses are on schedule.
As expected, profit for the primary aluminium business was negatively
impacted by the weak USD and hedge losses. Moreover, costs expensed
for Elkem Solar's new plant were NOK 53 million higher than in the
same quarter of last year.
Second-quarter profit before tax amounted to NOK 2.5 billion (NOK 3.1
billion in 2007). Orkla signed an agreement with Egmont in the second
quarter to sell the remainder of the Group's media business, i.e. its
40 per cent stake in Hjemmet Mortensen. This generated a book gain of
NOK 830 million for Orkla in the second quarter. All in all,
therefore, the sale of Orkla's media business has brought in
approximately NOK 9 billion, and a gain of around NOK 5 billion.
In a weak stock market, Orkla's Financial Investments division
delivered a negative return of 8.3 per cent, compared with a negative
return of 16.9 per cent for Morgan Stanley Nordic Index and a
negative return of 5.6 per cent for the Oslo Stock Exchange Benchmark
Index.
*) Operating profit (EBITA): Before amortisation, restructuring and
significant impairments
Ref.:
SVP Corporate Communications
Ole Kristian Lunde
Tel.: +47-2254 4431
SVP Investor Relations
Rune Helland
Tel.: +47-2254 4411
Date: 13 August 2008
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