Orkla Brands, the Norway-based food business, has seen first-quarter sales and earnings increase after raising prices to offset higher raw material costs.
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Operating profit rose 5% to NOK492m (US$97.4m) for the three months to the end of March, on the back of a 1% increase in revenue, which reached NOK5.3bn.
The business, a division of Norwegian conglomerate Orkla, was formed in January as part of a wider overhaul at its parent company.
Orkla Brands became the umbrella organisation for four business units, including three food divisions and a consumer brands business.
Underlying sales from Orkla’s Nordic food division rose 6% thanks to growth from pizza-to-ready meal businesses Procordia and Stabburet. Profits from the unit stayed flat at NOK327m.
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By GlobalDataHowever, Orkla saw losses from its international business widen to NOK27m due to increased investment in its Russian operations. Sales rose 10% to NOK526m.
“Orkla Brands is now showing profit improvements as a result of the action plan,” said president and CEO Dag J. Opedal. However, we are still seeing rising raw material costs, which will have to be offset by further price hikes.”
