Hydro's underlying earnings before financial items and
tax increased to NOK 2,930 million in
the second quarter from NOK 2,284 million in
the first quarter, mainly driven by higher
aluminium prices and favourable currency developments. Lower
realized alumina prices and increased raw material costs had a
negative impact on results.
· Underlying EBIT of NOK 2 930 million
· Higher realized aluminium prices, somewhat
offset by lower realized alumina prices and higher raw material
costs · Weak Rolled Products results primarily due
to reduced margins linked to product mix and
operational issues· Record quarterly result in
Sapa· Better program on track for 2017 target
of NOK 500 million· Agreement to acquire
Sapa, closing expected in second half 2017
· Karmøy Technology Pilot on time and budget,
expected start-up Q4 2017· 2017 global
primary demand growth outlook 4-6%, global market largely
balanced
"Higher aluminium prices in the quarter are lifting results, and
I am pleased to see Sapa delivering record results, continuing
the strong trend," says President & CEO, Svein Richard
Brandtzæg. "Hydro will confirm its position as the world's leading
integrated aluminium company with the
agreement to acquire Orkla's 50 percent interest in
world-leading extrusion company Sapa. The transaction reinforces
our strategic direction to become better, bigger and greener, with
a solid asset base, unique competencies and capabilities along the
full value chain," says Brandtzæg. Closing is expected in the
second half of 2017, pending regulatory approvals.
Underlying EBIT for Bauxite & Alumina decreased from the
first quarter. Lower realized alumina prices, driven by
a weaker alumina index and higher raw material
consumption weighed on results, while higher sales
volumes contributed positively. The Alunorte alumina refinery and
the Paragominas bauxite mine had higher production in the
second quarter following planned maintenance in the first
quarter. The ongoing ramp-up process of the new press filter
operation to remove and recycle caustic soda from bauxite
residue caused additional cost at the alumina refinery.
Underlying EBIT for Primary Metal increased in the
second quarter due to higher realized all-in
metal prices, partly offset by higher raw material
costs.
Underlying EBIT for Metal Markets
improved significantly in the second quarter, mainly
due to positive inventory valuation and currency effects, in
addition to better results from sourcing and trading
activities. Results from remelters also improved in the second
quarter driven by increased sales volumes and contribution
margins.
"We see a global primary aluminium deficit in the quarter. This
is driven by increasing deficit outside China. For the full year,
we are maintaining our 4-6 percent annual aluminium demand growth
outlook for 2017 and expect a largely balanced, global
aluminium market," says Brandtzæg.
Underlying EBIT for Rolled Products decreased in the
quarter compared to the first quarter of 2017. The
decrease was primarily due to reduced average margins driven by
product mix, and an accrual for employee compensation mainly
relating to previous years. The operational issues in the
first quarter were partly resolved, reducing the
negative cost effects on the second quarter results.
The Neuss aluminium plant benefited from the all-in metal price
development and lower alumina cost.
Underlying EBIT for Energy decreased compared to the previous
quarter, mainly due to seasonally lower production and prices.
Underlying EBIT for Sapa increased compared to the previous
quarter, delivering record quarterly result, in line with
general seasonality in the industry but also related to improved
performance.
Hydro continued to make progress on its "Better"
improvement program. While slightly behind plan, Hydro
still expects to reach both the year-end target of NOK
500 million and the 2019 target of NOK 2.9 billion.
Hydro's net cash position increased by NOK 0.1 billion
to NOK 6.0 billion at the end of the quarter. Net cash
provided by operating activities amounted to NOK 4.3 billion,
including dividends received from Sapa of NOK
1.5 billion and operating capital build-up due to seasonality
and higher prices. Net cash used in investment
activities, excluding short term investments, amounted to NOK
1.1 billion. During the second quarter dividends paid to Norsk
Hydro ASA shareholders amounted to NOK 2.6 billion.
Reported earnings before financial items and tax amounted to NOK
2,946 million for the second quarter. In addition to the factors
discussed above, reported EBIT included net unrealized
derivative losses of NOK 66 million and
positive metal effects of NOK 138 million. Reported
earnings also included a net loss of NOK 56
million in Sapa (Hydro's share net of tax) relating
to unrealized derivative losses and net foreign
exchange losses.
Net income amounted to NOK 1,562 million in the second
quarter. This includes a net foreign exchange loss,
mainly unrealized, of NOK 918 million reflecting
a weakening of BRL against USD affecting US dollar
debt in Brazil, while the strengthening of EUR
forward rates against NOK resulted in an unrealized loss
on the embedded derivatives in power contracts denominated in
EUR.
Key
financial information NOK million, except per share data |
Second quarter 2017 |
First quarter 2017 |
Change prior quarter |
Second quarter 2016 |
Change prior year quarter |
First half 2017 |
First half 2016 |
Year 2016 |
|
|
|
|
|
|
|
|
|
Revenue |
24,591 |
23,026 |
7
% |
20,391 |
21
% |
47,617 |
40,529 |
81,953 |
Earnings before
financial items and tax (EBIT) |
2,946 |
2,410 |
22
% |
1,978 |
49
% |
5,356 |
3,672 |
7,011 |
Items excluded from
underlying EBIT |
(16) |
(126) |
87
% |
(360) |
96
% |
(141) |
(552) |
(586) |
Underlying EBIT |
2,930 |
2,284 |
28 % |
1,618 |
81 % |
5,214 |
3,119 |
6,425 |
|
|
|
|
|
|
|
|
|
Underlying EBIT : |
|
|
|
|
|
|
|
|
Bauxite &
Alumina |
662 |
756 |
(12)
% |
174 |
>100
% |
1,418 |
363 |
1,227 |
Primary Metal |
1,486 |
900 |
65
% |
702 |
>100
% |
2,386 |
1,020 |
2,258 |
Metal Markets |
244 |
24 |
>100
% |
75 |
>100
% |
268 |
241 |
510 |
Rolled Products |
84 |
106 |
(21)
% |
242 |
(65)
% |
191 |
491 |
708 |
Energy |
284 |
423 |
(33)
% |
301 |
(6)
% |
707 |
699 |
1,343 |
Other and
eliminations |
170 |
74 |
>100
% |
125 |
37
% |
245 |
306 |
380 |
Underlying EBIT |
2,930 |
2,284 |
28 % |
1,618 |
81 % |
5,214 |
3,119 |
6,425 |
|
|
|
|
|
|
|
|
|
Earnings before
financial items, tax, depreciation and amortization (EBITDA) |
4,335 |
3,762 |
15
% |
3,222 |
35
% |
8,097 |
6,131 |
12,485 |
Underlying EBITDA |
4,319 |
3,637 |
19 % |
2,862 |
51 % |
7,956 |
5,578 |
11,474 |
|
|
|
|
|
|
|
|
|
Net
income (loss) |
1,562 |
1,838 |
(15)
% |
2,077 |
(25)
% |
3,401 |
4,459 |
6,586 |
Underlying net income (loss) |
2,214 |
1,580 |
40 % |
1,126 |
97 % |
3,795 |
1,949 |
3,875 |
|
|
|
|
|
|
|
|
|
Earnings
per share |
0.73 |
0.86 |
(16) % |
0.95 |
(24) % |
1.59 |
2.08 |
3.13 |
Underlying earnings per share |
1.04 |
0.75 |
38 % |
0.52 |
>100 % |
1.79 |
0.91 |
1.83 |
|
|
|
|
|
|
|
|
|
Financial
data: |
|
|
|
|
|
|
|
|
Investments |
1,420 |
1,372 |
4 % |
1,711 |
(17) % |
2,792 |
3,681 |
9,137 |
Adjusted net cash
(debt) |
(5,146) |
(5,358) |
4
% |
(8,758) |
41
% |
(5,146) |
(8,758) |
(5,598) |
|
|
|
|
|
|
|
|
|
Key Operational
information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bauxite production (kmt) |
2,943 |
2,400 |
23
% |
2,609 |
13
% |
5,343 |
5,292 |
11,132 |
Alumina production
(kmt) |
1,576 |
1,523 |
3
% |
1,554 |
1
% |
3,099 |
3,071 |
6,341 |
Primary aluminium
production (kmt) |
523 |
516 |
1
% |
518 |
1
% |
1,039 |
1,032 |
2,085 |
Realized aluminium
price LME (USD/mt) |
1,902 |
1,757 |
8
% |
1,546 |
23
% |
1,828 |
1,522 |
1,574 |
Realized aluminium
price LME (NOK/mt) |
16,265 |
14,798 |
10
% |
12,826 |
27
% |
15,517 |
12,887 |
13,193 |
Realized USD/NOK
exchange rate |
8.55 |
8.42 |
2
% |
8.30 |
3
% |
8.49 |
8.47 |
8.38 |
Rolled Products sales
volumes to external market (kmt) |
239 |
241 |
(1)
% |
238 |
0
% |
480 |
467 |
911 |
Sapa sales volumes
(kmt) |
180 |
178 |
1
% |
183 |
(2)
% |
357 |
358 |
682 |
Power
production (GWh) |
2,369 |
2,869 |
(17) % |
2,674 |
(11) % |
5,238 |
5,835 |
11,332 |
Investor contactContact Stian HasleCellular +47 97736022E-mail
Stian.Hasle@hydro.comPress contactContact Halvor MollandCellular
+47 92979797E-mail Halvor.Molland@hydro.comCautionary note Certain
statements included in this announcement contain forward-looking
information, including, without limitation, information relating to
(a) forecasts, projections and estimates, (b) statements of Hydro
management concerning plans, objectives and strategies, such as
planned expansions, investments, divestments, curtailments or other
projects, (c) targeted production volumes and costs, capacities or
rates, start-up costs, cost reductions and profit objectives, (d)
various expectations about future developments in Hydro's markets,
particularly prices, supply and demand and competition, (e) results
of operations, (f) margins, (g) growth rates, (h) risk management,
and (i) qualified statements such as "expected", "scheduled",
"targeted", "planned", "proposed", "intended" or similar.
Although we believe that the expectations reflected in such
forward-looking statements are reasonable, these forward-looking
statements are based on a number of assumptions and forecasts that,
by their nature, involve risk and uncertainty. Various factors
could cause our actual results to differ materially from those
projected in a forward-looking statement or affect the extent to
which a particular projection is realized. Factors that could cause
these differences include, but are not limited to: our continued
ability to reposition and restructure our upstream and downstream
businesses; changes in availability and cost of energy and raw
materials; global supply and demand for aluminium and aluminium
products; world economic growth, including rates of inflation and
industrial production; changes in the relative value of currencies
and the value of commodity contracts; trends in Hydro's key markets
and competition; and legislative, regulatory and political
factors.
No assurance can be given that such expectations will prove to
have been correct. Hydro disclaims any obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
This information is subject to the disclosure requirements
pursuant to section 5-12 of the Norwegian Securities Trading
Act.
Attachments:
http://www.globenewswire.com/NewsRoom/AttachmentNg/b8fec711-8126-44ef-8e56-84f1ea8dcbef
Attachments:
http://www.globenewswire.com/NewsRoom/AttachmentNg/314c6d48-5f06-4245-bf86-b65cb3ba1c8f
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