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Tikkurila’s Interim Report for January-June 2011 shows favourable revenue development continued while cost inflation weakened profitability. Revenue for the second quarter (Q2) increased by 8.7% y-on-y at €198.3M (4-6/2010: €182.5M). Operating profit (EBIT) excluding non-recurring items was €27.5M (28.4M) 13.8% (15.5%) of revenue and EPS was €0.39 (€0.46).
Revenue for the first half of the year increased by 10.3% y-on-y at €332.8M (1-6/2010: €301.8M). Operating profit (EBIT) excluding non-recurring items was €34.0M (€35.9M), 10.2% (11.9%) of revenue and EPS €0.42 (€0.55).
Erkki Järvinen, president and CEO commented: "Our revenue developed according to our expectations in the second quarter of the year. The market situation continued to be reasonably favourable in all of our key operating areas, and our revenue grew particularly due to sales price increases. Growth was brisk in the SBU East area and in its largest market Russia, where both sales volumes grew and the transfer of demand to the higher price and quality grade products continued. In Finland, the sales development did not meet our expectations.
"Our profitability in the second quarter was weakened by the continued challenging development in the prices and availability of the key raw materials, as well as the extensive cost inflation in other areas. Salary expenses rose in Russia, in particular, where we also further increased our sales and marketing inputs. During the review period the prices of the key raw materials were approximately 20% higher than in the corresponding period last year. We will continue to raise the sales prices in the coming months in order to cover the increased costs.”