Orkla ASA: announces Q3-2023 financial results

Oslo / NO. (ok) Operating revenues of Norway’s Orkla ASA increased by 14 percent in the third quarter to NOK 16.8 billion. The improvement is primarily due to price increases and positive currency translation effects. Eight out of 12 portfolio companies had underlying profit growth.

Orkla’s consolidated portfolio companies increased operating profit Ebit (adjusted) by 16 percent to NOK 1.8 billion in the third quarter.

The profit contribution from associates amounted to NOK 509 million, an improvement of 114 percent. Jotun (42.7 percent interest) was the main contributor to this improvement. Jotun’s profit was driven by volume growth, higher gross margin and good cost control.

Orkla’s profit before tax amounted to NOK 2.0 billion, down 9 percent from the third quarter of 2022. The main reason for the decline is significantly lower power prices. Hydro Power’s operating profit Ebit (adj.) was reduced from NOK 773 million to NOK 153 million.

Adjusted earnings per share rose by 2 percent to NOK 1.61 in the third quarter.

«I am pleased to report profit growth for most of the portfolio companies. It is gratifying to see Jotun’s continued strong growth and that Orkla India is delivering solid growth on top of last year’s good profit. The start-up of a new biscuit factory in Latvia has been more difficult and complex than anticipated and has impacted negatively on our profit.

Continued high inflation, lower buying power and reduced demand have had a negative effect on sales volumes in several portfolio companies. Major cost improvement measures are proceeding as planned and contributing to reduce cost growth,» says Orkla President and CEO Nils K. Selte.

Orkla is a leading industrial investment company with a brands and consumer-oriented scope. A new business model comprising 12 autonomous portfolio companies was implemented as of 1 March 2023.

«The portfolio companies have recently finalised their strategic plans for the coming years. It will be some time before we see the results of the good work that has been done. Orkla’s new business model better facilitates structural measures, but in the short and medium term the most value-creating activities will be to improve the performance of our portfolio companies. We will come back to this topic at our upcoming Capital Markets Day at the end of November,» says Nils K. Selte.

Orkla Foods Europe, which is Orkla’s largest consolidated portfolio company, has today announced a change of CEO, as Paul Jordahl wishes to step down. Atle Vidar Nagel Johansen, who is currently EVP + Investment Executive at Orkla, will serve in the role temporarily as from 1 November 2023.