Jotun Reports Good Financial Results

The Jotun group generated sales of NOK 4,260 million in the first eight months of 2004, up NOK 496 million on the same period last year. The group recorded profit on ordinary activities before taxation of NOK 468 million, against NOK 379 million in 2003.

"We're very pleased with our results so far this year, in terms of both sales and earnings," says CEO Knut Almestrand, adding that good progress was made in most business areas, the exception being marine coatings, which is continuing to battle with weak earnings.

Each year Jotun invests substantial amounts in existing and new markets and in the development of new products. A further NOK 150 million was invested in fixed assets during the first eight months of this year. New factories were opened in Dubai and Pakistan in March, and a new paint factory in Vietnam is due to start up in November. New paint factories are also under construction in China and Indonesia.

Jotun Dekorativ (decorative products in Scandinavia) has performed well so far this year. There has been good growth in the consumption of coatings, and Jotun has retained its strong market position. Sales have grown, and the division has increased its earnings. The greatest progress has been made in Norway and Sweden, while sales in Denmark are on a par with last year.

Work is under way on a series of projects to further increase the division's efficiency and competitiveness. Jotun Paints (primarily decorative products in the Middle East and Southeast Asia) continued to make progress. Demand is growing strongly in both regions, in which Jotun commands a strong market position. However, the division is seeing growing competition from local players and international coating companies.

Jotun Coatings (marine and protective coatings for industrial and offshore use) recorded increased sales and volumes, but earnings were down on last year, due primarily to a sharp increase in raw material prices. Work is under way to raise sales prices, but the impact of this work on the division's results will not be immediate.

Jotun Powder Coatings has performed well so far this year, with higher sales and substantially better earnings. The extensive restructuring of the division is beginning to pay off and boost earnings. The markets of Eastern Europe are continuing to grow, while the decline in Scandinavia has bottomed out. Demand remains strong in the Middle East, but the picture in Southeast Asia is varied. The division is investing in increased research and development, and is also building up more production capacity for further expansion.

Jotun's results in 2003 were among the best in its history, and the results so far this year show continued progress. The earnings outlook for the rest of the year is uncertain, due primarily to rising raw material prices and so reduced margins. Nevertheless Jotun expects that earnings can be maintained at a satisfactory level, and that earnings for the year as a whole will be somewhat higher than in 2003.