The Jotun Group reported total operating income of NOK 8,044 million (~$1.4 billion) and a profit before tax of NOK 1,032 million (~$177 million) for the first eight months of 2010. "We are continuing the same positive trend as in the first four-month period. The sales volume has increased in all divisions with the exception of Dekorativ, and the cost development trend has been good for the period. We have also made substantial investments in strategically important markets and infrastructure," said president and CEO Morten Fon. The final result for 2010 is expected to be on par with last year's result.
The Jotun Dekorativ division showed significantly improved earnings compared with the same period last year. The sales volume in Norway has declined somewhat, but sales value has increased. Denmark's results are somewhat lower than in 2009, while the division’s growth in Sweden is significant.
Jotun Coatings is showing growth in both sales volume and sales value, with the greatest growth in China and South Korea. Higher raw material prices are still a challenge, and we have implemented measures such as price increases and product mix modifications to improve profitability.
Jotun Paints continues to show the good growth we have seen for some time now, and sales are particularly good in Vietnam, Indonesia and Oman. New markets such as Libya and Pakistan are also reporting healthy growth.
All of the divisional units in Powder Coatings are expected to report a record year in terms of sales and earnings. Strengthened profitability has been achieved as a result of higher margins and a positive development in both the working capital and cost level.
"The global financial crisis has had less impact than expected for the Jotun Group, due to the late-cyclical nature of the business, and because we have managed to effectively steer the group through a differentiated approach to the markets. We have acted in a precautionary manner, restructured quickly and managed to direct resources towards segments and markets with the best growth and profitability," said Fon.
The high level of investment in facilities will continue in order to meet the increasing demand for Jotun's products. Jotun has invested NOK 295 million (~$50 million) thus far this year. The largest investments are related to factories in Norway, Malaysia and the U.S., in addition to implementation of Jotun's new global ERP system to improve control, production flow and service level.
Jotun is upholding expectations of good results for 2010, based on the improvement in the Jotun Dekorativ division, increased profitability in Jotun Powder Coating, promising growth in the Protective segment, and the marine market performing better than anticipated.