Profits from Orkla‘s consumer goods arm fell more than 10% in the first half of the year, the Norway-based conglomerate said today (20 July).
The company saw EBITA from its Orkla Brands division drop 10.5% to NOK1.14bn (US$207.6m) in the six months to the end of June. The fall in profits came despite an 8.1% rise in operating revenues to NOK11.72bn.
Orkla pointed to a revamp of its business in Russia, pressure from input costs and lower volumes at its domestic Bakers unit.
The company said the formation of Orkla Brands Russia will lower its costs in the country but did lead to “substantial one-off costs”, particularly in the first quarter.
The reorganisation meant losses from Orkla Brands International widened from NOK15m in the first half of 2010 to NOK89m in the first six months of 2011.
Nevertheless, operating revenues from Orkla Brands’ international arm were up 6.3% to NOK893m. Underlying sales, excluding one-off items, climbed 7.3%, Orkla said.
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The company’s Orkla Foods Nordic unit fell 1.9% to NOK463m. On an underlying basis, profits slipped 3%. The division saw operating revenues climb 3.4% to NOK4.6bn, although underlying sales dipped 0.5%. “The decrease in both sales and profit was primarily related to the negative volume trend at Bakers,” Orkla said.
For the whole company, Orkla, which also operates in the aluminium sector, posted an 18% increase in EBITA to NOK1.87bn. Sales were up 13.4% at NOK30.9bn.
Click here for the full statement from Orkla.