Norway's Orkla Beats Forecasts with Q3 Profit

Norwegian food and industrial conglomerate Orkla reported third-quarter earnings above forecasts on Wednesday and predicted margin pressures in its vital grocery business.

Orkla, which has been selling assets to focus on branded consumer and grocery goods, said earnings before interest, tax and amortisation (EBITA) rose 5% to 857 million crowns ($150 million), beating analyst forecasts for 820 million crowns.

"Due to the mix of raw materials and a certain contractual time lag, raw material costs in the branded consumer goods business are still slightly higher than in 2011," it said in a statement.

"Selling prices are being raised to compensate for this effect," it added.

Orkla recently sold off its chemicals unit Borregaard and also agreed to combine much of its struggling aluminium business with Norsk Hyrdo to focus on consumer goods such as foods, detergents and oral hygiene products.

Its branded goods revenues fell by 2% in the third quarter on weak European markets and the firm predicted more softness ahead even as its U.S. markets experience moderate growth.

However, in its vital Nordic grocery business, Orkla predicted "relatively stable" markets ahead.