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February 11, 2014

NORWAY: Orkla Q4 earnings slip despite sales gain

Nordic consumer goods company Orkla has booked a drop in fourth-quarter operating profit, despite an improved top-line performance.

Nordic consumer goods company Orkla has booked a drop in fourth-quarter operating profit, despite an improved top-line performance.

Orka said EBITA fell to NOK1.02m (US$166.2m) in the three months to the end of December, down from NOK1.12m in the comparable period a year ago. During the quarter, the company lapped a one-time gain on the sale of real estate registered in the fourth quarter of 2012.

Operating profit at Orkla Foods’ arm rose to NOK422m, compared with NOK368m in the fourth quarter of 2012. The group’s businesses in Sweden, Finland and the Baltics achieved both top-line and profit growth, the company said.

The firm’s confectionery and snacks unit was hit by “challenging” conditions in Sweden and Finland and total operating profit slid to NOK234m, compared with NOK255m.

Orkla’s international arm posted operating profit of NOK4m, compared with NOK62m in the same period of 2012. The company has initiated a strategic review of its operations in the eastern Europe and Russia.

Net profit was boosted as the group lapped charges associated with discontinued operations that totalled NOK310m in 2012. Net profit rose to NOK337m, up from NOK164m the previous year.  

Orkla’s sales totalled NOK9.45bn, compared with NOK8.42bn in the corresponding period of 2012. Gains were driven by the contribution from Norway-based food group Rieber & Søn, which the group acquired last year.

In a separate announcement, Orkla said chief executive Åge Korsvold will be replaced by industry veteran Peter Ruzicka.

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