Norwegian conglomerate Orkla has reported growth in profitability in the third quarter, with adjusted earnings before interest and taxes (EBIT) up by 13%, year on year, to NOK 2.1 billion (€180 million).
Orkla’s consolidated portfolio companies, including HQ and Business Service, posted a 20% increase in adjusted EBIT, to NOK 2.0 billion (€170 million), the company noted.
The company attributed this growth to organic revenue growth, margin improvement, and positive mix effects.
Orkla saw positive volume growth for the third successive quarter, with operating revenues rising by 4.3%, year on year.
The president and CEO of Orkla, Nils K. Selte, stated, “It is encouraging to observe that most of our companies have increased their operating margins while making substantial investments behind their brands through higher advertising spend. Jotun also delivered a good quarter, with continued sales momentum from volume growth and solid operating profits.”
Quarterly Highlights
Profit from associated companies rose by 8.1%, year on year, amounting to NOK 550 million (€46.3 million). Adjusted earnings per share increased by 10%, to NOK 1.77.
The company’s ‘other income and expenses’ amounted to a negative NOK 741 million (€62.4 million), following a write-down of NOK 299 million on its common ERP template platform, as well as write-downs of NOK 350 million (€29.5 million) related to trademarks and goodwill in some of Orkla’s portfolio companies.
This was largely related to Orkla Confectionery & Snacks’ write-down of trademark and goodwill in Orkla Confectionery & Snacks Latvija (not related to the new biscuit factory) and Orkla Food Ingredients’ write-down of goodwill in NIC Germany, the company noted.
Adjusted EBIT at its Hydro Power division amounted to NOK 149 million (€12.6 million), reflecting a year-on-year decline of 2.5%, due to significantly lower power prices in the southern and south-western parts of Norway.
In June, the company agreed to sell 100% of its shareholding in Lilleborg AS to Solenis for NOK 600 million (€52.36 million) on a cash and debt-free basis.
