June 4, 2018 / 4:17 AM / 2 months ago

Paint maker Jotun's profit declines despite higher sales

OSLO, June 4 (Reuters) - Norwegian paint maker Jotun, of which Orkla owns 42.6 percent, reported the following Jan-April earnings and outlook:

* Revenues: NOK 5.66 billion ($694.05 million), up 6 pct y/y

* Operating profit: NOK 561 mln vs year-ago NOK 670 mln

* Operating profit significantly impacted by increasing raw material prices

* While growth and result in Decorative Paints is expected to remain satisfactory, results in Performance Coatings will continue to be impacted by lower gross margins and challenging markets, especially in the Marine segment

* However, Protective Coatings has shown solid sales growth year to date, and the market outlook for the Offshore sector has improved

* The sharp increase in raw material prices experienced last year and the beginning of this year will continue to have a negative impact on gross margins over the next tertiary

* However, continued focus on cost control and profit improvement initiatives, including sales price increases in all segments and regions, will gradually contribute to offset these effects. Raw material prices have recently also shown signs of flattening out

* Jotun will continue its organic growth strategy and maintain focus on operational effectiveness by investing in production capacity in both existing and new markets, as well as further developing its systems and personnel ($1 = 8.1550 Norwegian crowns) (Reporting by Oslo newsroom)

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