Norway's Orkla has reported a 39% increase in operating profit in the second quarter of its financial year, to NOK 1.75 billion (€170 million), as the business achieved strong growth in its branded consumer goods business.
Operating revenues at the business rose by 21% in the quarter, to NOK 14.3 billion (€1.4 billion), while adjusted earnings per share rose by 17% to NOK 1.33.
Branded Consumer Goods
Its branded consumer goods business saw 17% growth in second-quarter revenues, while the group was also 'positively affected' by the reopening of the foodservice and out of home channels.
However its branded consumer goods business reported a marginal decline in operating profit, it noted, largely due to higher prices for raw materials and packaging, as well as rising fresh and energy prices and general cost inflation.
Its Orkla Food Ingredients arm saw the biggest improvement in turnover, reporting organic growth of 22% in the period. Orkla Foods saw growth of 12%, while Orkla Confectionery & Snacks and Orkla Care had organic turnover growth of 9% and 8% respectively.
Maintaining A Good Performance
“At Orkla we have succeeded in maintaining a good delivery performance to our customers at a difficult time," commented Orkla president and CEO Nils K. Selte. "We achieved broad-based turnover growth in branded consumer goods, with both price and volume improvement.
"We have had to implement price increases to compensate for unusually high increases in input prices. In June, we saw abnormally high sales in some markets ahead of announced price increases as from 1 July."
Selte added that the business will make adjustments to its business model and organisation in order to enable it to step up its "pace, growth and value creation".
The company will seek to afford its various businesses greater autonomy and "decision making authority" un order to provide structural flexibility and additional value creation.