76
FINANCIAL INFO
EXECUTIVE SUMMARY OF THE
FINANCIAL STATEMENT FOR 2017
GENERAL
The consolidated financial statement consists of Jotun A/S and
54 subsidiaries, three joint ventures in China and Korea and six
associated companies in U.A.E. and Saudi Arabia. Subsidiaries
are fully consolidated independent of shareholding, while joint
ventures and associates are accounted for based on the equity
method and share of profit reported in the income statement
based on actual shareholding.
The Jotun Group’s consolidated financial statement has been
prepared in accordance with International Financial Reporting
Standards (IFRS) and interpretations as adopted by the
International Accounting Standards Board (IASB) and approved
by the European Union (EU).
REVENUE
Operating revenue for the Group was NOK 16 401 million, up
four per cent compared to 2016. While the Decorative Paints
and Powder Coatings segments continued to grow, revenues
in the Marine and Protective segments were impacted by lower
activity in the shipping and offshore newbuilding markets.
In addition, sales were negatively impacted by a stronger
Norwegian krone.
OPERATING PROFIT
Operating profit in 2017 decreased by 23 per cent to NOK
1 354 million compared to 2016, yielding an operating margin
of 8 per cent (2016: 11 per cent). The reduction in profit is
mainly attributable to the increase in raw material prices. Jotun
Group’s share of net result after tax in associates and joint
ventures totalled NOK 537 million compared to NOK 690 million
in 2016. The reduction is mainly attributable to higher raw
material costs and continued weak shipbuilding and offshore
markets in China and Korea.
PROFIT FOR THE YEAR
The profit for the year amounted to NOK 798 million, a
reduction of NOK 334 million from 2016. Net financing charges
decreased from 2016 mainly due to currency losses in Egypt last
year, and net financial costs ended at NOK 118 million (2016:
NOK 169 million).
INVESTMENTS
Total purchase of property, plant and equipment (PP&E) and
intangible assets amounted to NOK 967 million for 2017 (2016:
NOK 1 133 million), representing six per cent of operating
revenue (2016: 7 per cent). Including investment activity in
associates and joint ventures, total investment in PP&E for
production of Jotun-branded products was NOK 950 million.
The largest investments relate to new production facilities in
Malaysia, Myanmar and the Philippines, in addition to a new
R&D centre and office buildings in Sandefjord, Norway.
Jotun Group’s share of total equity in associates and joint ventures
amounts to NOK 1 616 million (2016: NOK 1 766 million), and is
reported as non-current assets in the balance sheet.