Increase in Orkla's operating profit

• Improved market conditions for Orkla Aluminium Solutions and Elkem's silicon operations contributed to 11% growth in sales: NOK 14,893 million compared to NOK 13,448 million in the first quarter of 2009. 
• Group EBITA* totalled NOK 704 million, compared to NOK 233 million last year.
• Satisfactory profit improvement for Orkla Brands compared to a relatively weak first quarter in 2009. 
• Orkla Aluminium Solutions reduced its cost base and experienced positive market growth that led to a significant turnaround in profits. First-quarter EBITA* amounted to NOK 129 million (NOK -342 million)**.
• Increased capacity utilisation and higher prices for Elkem Silicon-related (excluding Elkem Solar). Due to the extreme weather situation experienced by the Saudefaldene plant, with low inflow and low reservoir levels, production was considerably lower than normal, and the results for Elkem's remaining energy operations were weak. Comparative figures for 2009 include divested power plants. 
• REC reported EBITDA of NOK 415 million for the first quarter (NOK 510 million)**. Jotun has had a satisfactory start to the year, with results that are slightly better than last year. 
• The Group's investment in REC is accounted for according to the equity method. Orkla calculates the value of its stake on the basis of the market price, as long as the market price is lower than the carrying value under the principles applicable to associates. The market price was NOK 27.80 kroner on 31 March 2010, compared to NOK 44.75 on 31 December 2009. A total of NOK -4.552 million has been recognised in the income statement in connection with REC in the first quarter.
• Including the change in the value of REC, the Group's pre-tax result in the first quarter was NOK -3.422 million (NOK -315 million)**.
• The Share Portfolio delivered a first-quarter return of 11.2%, compared to the 10.2% return of the Morgan Stanley Nordic Index and the 1.4% return of the Oslo Stock Exchange Benchmark Index.
• Net interest-bearing liabilities remained more or less unchanged during the first quarter, totalling NOK 19,861 million at the end of the quarter.

The Group
Orkla's first-quarter operating revenues totalled NOK 14,893 million, compared to NOK 13,448 million in the weak first quarter of 2009. The improvement is due to the increased demand and volume growth experienced by Orkla Aluminium Solutions, as well as higher prices and better markets for Orkla Materials' silicon-related products. Currency translation effects had a negative impact of NOK 846 million on first-quarter operating revenues.

Group EBITA* for the first quarter totalled NOK 704 million (NOK 233 million)**. Profit was impacted by negative currency translation effects totalling NOK 24 million in the quarter.

Orkla Brands delivered yet another good quarter. There was a positive trend in volume/mix, but sales were also positively affected by the timing of Easter compared to last year. Profit growth was broad-based and driven by innovations, cost improvements and positive currency effects related to purchasing.

Orkla Aluminium Solutions' markets showed a positive trend in the first quarter. There was market growth in most segments in North America, and there were signs of improvement in several European markets. The exception is the building and construction market, which remains weak on both continents.

As regards Orkla Materials, Elkem Silicon-related reported a positive underlying*** trend, with higher capacity utilisation and higher prices for key products. While Borregaard Chemicals reported improved profits for the speciality chemicals and ingredients businesses, this was more than counteracted by the more demanding market conditions faced by the fine chemicals business. Orkla Materials Energy reported abnormally weak results in the first quarter, due to the extraordinary weather situation at Saudefaldene. Extremely low inflow and very little snow resulted in low reservoir levels at quarter-end. Production totalled only 203 GWh, compared to a presumed normal first-quarter level of over 500 GWh. Elkem Solar continued to ramp up its plant in Kristiansand, and around 400 tonnes of solar-grade silicon were produced in the quarter.

The Group's equity interests in REC (39.7%) and Jotun (42.5%) are presented according to the equity method on the line for associates. Orkla uses the market price as the value of its stake in REC, as long as the market price is lower than the carrying value in accordance with the principles applicable to associates. The market price was NOK 27.80 on 31 March 2010, compared to NOK 44.75 on 31 December 2009. A total of NOK -4,552 million was recognised in the income statement in connection with REC in the first quarter.

The return on Orkla's Share Portfolio in the first quarter was 11.2%, compared to the 10.2% return of the Morgan Stanley Nordic Index (1.4% for the Oslo Stock Exchange Benchmark Index). At quarter-end, the market value of the Share Portfolio was NOK 11,727 million, after net share sales totalling NOK 389 million. Gains, losses and write-downs on the Share Portfolio amounted to NOK 339 million in the quarter (NOK -315 million)**. Accounting write-downs totalled NOK 11 million in the first quarter.

Dividends received by the Group in the first quarter totalled NOK 138 million (NOK 45 million)**.

Orkla's diluted earnings per share were NOK -3.6 in the first quarter, compared to NOK 0.7 in 2009. The change in the value of REC accounted for NOK -4.5 per share.

* Operating result before amortisation, gain on sale of power plants, restructuring and significant impairments
** Figures in parentheses are for the corresponding period in the previous year
*** Excluding acquisitions, divestments and currency translation effects.