FINANCIAL PERFORMANCE
76
Executive summary of the
financial statement for 2018
General
The consolidated financial statement consists of Jotun A/S and
53 subsidiaries, three joint ventures in China and South Korea
and five associated companies in the UAE. 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 17 660 million.
The revenue increase of eight per cent is primarily ascribable
to growth in Protective Coatings and Decorative Paints, as the
Marine Coatings and Powder Coatings segments were impacted
by lower activity in the markets. Still, all regions and segments
reported higher sales in 2018 than in 2017.
Operating profit
Operating profit in 2018 of NOK 1 361 million was on level with
last year, yielding an operating margin of eight per cent (2017:
eight per cent). A continued increase in raw material costs has
largely been offset by higher selling prices. Jotun Group’s share
of net result after tax in associates and joint ventures totalled
NOK 384 million compared to NOK 537 million in 2017. The
reduction is mainly attributable to higher raw material costs,
continued weak shipbuilding markets in China and South Korea
and lower activity in Saudi Arabia.
Profit for the year
The profit for the year amounted to NOK 674 million, a reduction
of NOK 124 million from 2017. Net financing charges increased
from 2017 mainly due to currency losses on Jotun A/S’ hedging
portfolio compared to currency gains last year. Net financial costs
ended at NOK 246 million (2017: NOK 118 million).
Investments
Total purchase of property, plant and equipment (PP&E) and
intangible assets amounted to NOK 1 089 million for 2018
(2017: NOK 967 million), representing six per cent of operating
revenue (2017: 6 per cent). Including investment activity in
associates and joint ventures, total investment in PP&E was
NOK 1 040 million. The largest investments relate to the new
headquarters and R&D centre in Sandefjord, Norway, in addition
to new production facilities in Egypt and Vietnam.
Jotun Group’s share of total equity in associates and joint ventures
amounts to NOK 1 533 million (2017: NOK 1 616 million) and is
reported as non-current assets in the balance sheet.