Nordic food group Orkla revealed second-quarter operating profit grew by more than one-quarter this morning (15 July), supported by a stronger performance from its consumer goods brands.
The conglomerate said group operating profit increased to NOK996m (US$119m) in the three-month period, up 26% year-on-year. The company’s consumer business – its long-term focus with plans to dispose of its energy businesses such as Sapa – grew operating profits by 20% versus the second quarter of last year. “Orkla has been strengthened by a number of acquisitions and internal improvement projects,” the company said.
Orkla’s operating revenues increased by 22% in the second quarter, to NOK9.43bn. Organic turnover growth for its branded consumer goods business was 3.8%, the group added.
“For the ninth consecutive quarter we saw organic sales growth in the branded consumer goods business. Orkla had significant improvement in operating profit due to higher sales and internal improvement projects. In addition, demanding integration efforts are under way in the wake of several acquisitions,” said Orkla president and CEO Peter Ruzicka.
Recent M&A includes Orkla’s acquisition of Hame, making it one of the largest food companies in the Czech Republic, Slovakia and Romania
Orkla said that it plans to increase investment in its branded consumer businesses. During the first half of 2016, Orkla freed up about NOK1.3bn through the sale of shares and property. The funds will be used to invest further in the branded consumer goods business, the company revealed.