Tine, Norway’s largest dairy company, saw first-quarter profits fall sharply to NOK10m (US$2m) from NOK53m in the same period in 2007.

The company said high costs and lower margins dented its profits despite a 12% increase in turnover to NOK4.1bn.

Tine, a producer, distributor and exporter of dairy products, said its first and last quarters were traditionally the two weakest of the year.

Tine said new products, including Omega-3 brands, had performed strongly, but that the market was highly competitive and costs had been higher than forecast.

To try and tackle these issues, the company said it planned to cut administration costs and modernise equipment, as well as continue to develop new product lines.