Norwegian conglomerate Orkla today (9 February) booked “satisfactory” operating profit for fiscal 2011, as its consumer goods unit Orkla Brands maintained a “strong” position in “challenging” market conditions.
The company revealed that group operating profit for the 12 months to 31 December rose to NOK4.04bn (US$701m), up approximately NOK100m on the previous year. Sales increased by 6% to NOK61bn.
However, increasingly difficult trading conditions saw profits slump during the fourth quarter, the company added. For the three months ended 31 December, Orkla reported EBITA of NOK1.05bn, down from NOK1.32bn last year.
Orkla Brands, the group’s food and consumer goods arm, saw fourth-quarter EBITA decline to NOK876m, down from the NOK910m booked during the comparable period of the previous year. The company said that the decrease in earnings was the consequence of weaker December sales in the Nordic region, but emphasised that its Russian business “continued its positive trend”.
“Despite demanding markets, it is gratifying to see that Orkla Brands is maintaining its strong market positions in the Nordic region, despite having raised prices to compensate for higher raw material costs. We are also pleased that the measures implemented in Russia are now producing results,” president and CEO Bjørn Wiggen said.
Updating the market on the group’s strategy to transform itself into a branded consumer goods company, Orkla said that the process is “in full swing”.
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“In the course of 2011, we strengthened our financial leeway through the sale of Elkem and the sell-off of holdings in the share portfolio. At the same time, we have paid out substantial capital to our shareholders. We have identified several possible candidates for acquisition, and have the necessary expertise and patience to make good acquisitions,” Wiggen commented.
In a separate announcement this morning, Orkla also announced the promotion of Karl Otto Tveter to the post of executive vice president, legal affairs. Tveter, who will take a seat on the group’s board, has worked at Orkla since 1992, having most recently served as senior vice president, legal affairs. In his new role, Tveter’s additional responsibilities will include overseeing the group secretariat. He will also act as secretary to the board of directors.