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Another record year for Jotun

Published on 2005-10-03. Author : SpecialChem

The Jotun Group will probably match last year's record results. At the end of the first 8 months of the year the Group's operating income totalled NOK NOK 4 619 million. Not only was this NOK 359 million up on the same period last year, but the operating income is equal to last year, despite unfavourable exchange rate developments and the continuing high price of raw materials.

The performance is in line with last year, which was the best year ever recorded by Jotun. – We are satisfied with the strong organic growth in sales, both in volume and value, says CEO Knut Almestrand, also pointing out that the stronger NOK and the continuing high price of raw materials are contributing to the pressure on margins.

At the end of August the operating profit was at NOK 476 million, an increase on last year's corresponding figure of NOK 468 million. Due to higher financial costs the pre-tax profit fell to NOK 450 million, down from NOK 464 million in 2004.

In order to meet the increasing demand for Jotun's products, Jotun will continue to invest in new and existing production facilities. Group investments in the first 8 months of the year amounted to NOK 244 million, against NOK 132 million in the same period last year related to a number of projects for upgrading existing production facilities and the construction of new production units in China and Indonesia.

Jotun Dekorativ which produces decorative paints, stains and varnish products for the Scandinavian market has maintained its strong position in Norway, despite increasing competition from private labels within the trade. Higher sales to the professional market in Denmark and new chains in Sweden have strengthened Jotun's position in the Scandinavian market.

Sales of coatings for marine, industrial and offshore purposes are also increasing, and following the implementation of restructuring initiatives Jotun Coatings has strengthened its position in most markets. Jotun believes that the growth of the paint market in China offers a great potential, and a new production plant will be opened in January 2006. The localisation and greater production capacity will strengthen the division's market position in Northeast Asia.

Jotun Paint's businesses in the Middle East and Southeast Asia report good results and sales growth. Jotun is now the market leader in decorative coatings in the Middle East and there is a increasing demand for the company's products. There is a great emphasis on innovation under the Multicolor concept and the launch of new products.

Jotun Powder Coatings has continued to record a satisfactory development in both volumes and operating income, but the increasing cost of raw materials and fierce competition in some markets have led to weaker margins for the division. Jotun is responding to the increasing competition by strengthening its focus on the development of new products and concepts. At the same time, Jotun will invest to increase production capacity.

I am very pleased that the positive trend from 2004 has continued in 2005. Through investment geared to future requirements, and with a dedicated and professional workforce coupled with innovative product development, Jotun will ensure that all divisions continue to maintain good progress, says CEO Almestrand.

Source: The Jotun Group


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