Orkla ASA: announces continued improvement in Q2-2023

Oslo / NO. (ok) Operating revenues of Norway’s Orkla ASA increased by 20 percent to NOK 17.1 billion in the second quarter. 11 of Orkla’s 12 portfolio companies reported profit improvement. Adjusted earnings per share rose by 17 percent to NOK 1.55 for the second quarter.

Orkla’s consolidated portfolio companies increased operating profit Ebit (adjusted) by 29 percent to NOK 1.6 billion in the second quarter. All portfolio companies in Orkla had good organic growth, but most of them also saw a certain decline in volume.

The contribution to Orkla’s profit from Jotun (in which Orkla owns a 42.7 percent interest) totalled NOK 533 million, which is an improvement of 124 percent. Jotun’s profit was driven by volume growth, improved gross margin and good cost control.

«I am pleased with the quarter and particularly with Jotun’s strong performance. Orkla’s other portfolio companies also showed good profit improvement. The costs of Orkla’s input factors were substantially higher than in the same period of 2022, and we have implemented price increases to compensate for this rise. Higher inflation and rising interest rates have reduced consumer buying power in most of our markets, which has in turn put pressure on our sales volumes,» says Orkla President and CEO Nils K. Selte.

«Orkla has previously announced that it will implement cost-cutting measures for a total cost of around NOK 1 billion across its portfolio in 2023. Its expectations of these programmes remain unchanged, and cost reduction programmes already initiated are on track,» he adds.

Hydro Power had operating profit Ebit (adjusted) of NOK 282 million, compared with NOK 579 million in the same period of 2022. The decline is due to significantly lower power prices than in the second quarter 2022.

The group’s «Other income and expenses» totalled NOK -202 million in the second quarter, compared with NOK -50 million year in the same period of 2022. The increase is mainly related to the process of finding a partner for Orkla Food Ingredients and to restructuring projects in the group.