Norsk Hydro fourth quarter 2012: Improved result on lower input costs

Marketwired

OSLO, NORWAY--(Marketwire - Feb 12, 2013) - Hydro's underlying earnings before financialitems and tax improved to NOK 138million in the fourth quarter 2012 from an underlying loss of NOK 19million inthe previous quarter. Lower energy costs in Bauxite & Alumina, lowervariablecosts in Primary Metal and improved results for the Qatalum aluminum plantcontributed to underlying results.

* Underlying EBIT NOK 138 million

* Lower raw material costs

* Lower realized aluminium prices, higher alumina prices

* Higher power prices and production in Energy

* 2013 aluminium demand growth outlook 2-4 % in world outside China

* Proposed 2012 dividend NOK 0.75 per share

"On the back of continuing challenging markets, our focus remains onimprovingperformance across our value chain. The ambitious USD 300 program isexpected tobe completed at the end of 2013, strengthening Hydro's industry position.Ourimprovement efforts will continue, including plans to optimize productionandperformance in our bauxite and alumina operations in Brazil," Hydro'sPresidentand CEO Svein Richard Brandtzæg said.

Bauxite & Alumina's underlying EBIT improved compared to the third quarter,dueto higher alumina prices and lower energy costs for Alunorte, together withhigher results from commercial operations.

Underlying EBIT for Primary Metal improved compared to the third quarter,mainlydue to better results in Qatalum. Lower realized aluminium pricesnegativelyaffected underlying EBIT, partly offset by lower operating costs. Savingstargeted for Hydro's cost improvement program were achieved for the year.

Excluding inventory and currency effects, underlying results for Hydro'sMetalMarkets operations declined, mainly due to lower volumes and marginstogetherwith lower results from sourcing and trading operations.

Underlying EBIT for Rolled Products declined compared with the thirdquarter,impacted by lower margins and seasonally higher maintenance costs.

Underlying EBIT for Energy increased in the quarter due to seasonallyhigherproduction and prices.

Other and eliminations includes a significant negative charge related toelimination of unrealized gains and losses on internal inventories.

Operating cash flow was NOK 2.8 billion for the quarter. Net cash used forinvestment activities amounted to NOK 1.0 billion. Hydro's net cashposition wasaround NOK 1.7 billion at the end of the fourth quarter.

For the full year 2012, underlying EBIT declined substantially to NOK 1,158million from NOK 5,982 million in 2011. Lower aluminium prices and aluminaprices had a significant effect on underlying results for the year. Ongoingefforts to reduce costs and improve operations partly offset the negativemarketeffects.

On October 15 Hydro announced an agreement with Orkla ASA to combine theirrespective extrusion profile, building systems and tubing businesses in anewjoint venture company to be named Sapa. Completion of the transaction isexpected to take place in the first half of 2013, following approval by therelevant competition authorities. Following the agreement, operatingresults forHydro's Extruded Products are presented net of financial items and tax asIncome(loss) from discontinued operations and excluded from reported EBIT andunderlying EBIT.

Hydro's Board of Directors proposes to pay a dividend of NOK 0.75 per sharefor2012, reflecting the company's strong commitment to provide a cash returnto itsshareholders. The dividend reflects our operational performance for 2012and astrong financial position, also taking into consideration the uncertainmarketoutlook.

Earnings before financial items and tax amounted to NOK 669 million in thefourth quarter, including net unrealized derivative gains and positivemetaleffects of NOK 555 million and other items amounting to negative NOK 23million.

In the previous quarter, Hydro incurred a reported loss before financialitemsand tax of NOK 267 million, including net unrealized derivative losses andnegative metal effects of NOK 137 million and other items amounting tonegativeNOK 112 million. Other items included impairments of non current assets ofNOK140 million and a gain of NOK 68 million relating to pensions.

Income from continuing operations amounted to NOK 364 million in the fourthquarter including net foreign exchange loss of NOK 102 million. In thepreviousquarter, Hydro incurred a net loss from continuing operations of NOK 64million,including net foreign exchange gains of NOK 282 million.

Loss from discontinued operations amounted to NOK 251 million in thequarter,including rationalization and closure costs of NOK 174 million. In thethirdquarter, loss from discontinued operations amounted to NOK 167 million,including rationalization and closure costs of NOK 43 million and a loss ondisposal of Portalex amounting to NOK 144 million.


Key financial
information
% change
NOK million, Fourth Third % change Fourth prior
except per quarter quarter prior quarter year Year Year
share data 2012 2012 quarter 2011 quarter 2012 2011
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Revenue 15585 14722 6 % 17157 (9) % 64181 71500



Earnings
before
financial
items and tax
(EBIT) 669 (267) > 100 % 46 > 100 % 432 10068

Items excluded
from
underlying
EBIT (532) 249 > (100) % 1176 > (100) % 725 (4086)
---------------------------------------------------------------------------
Underlying
EBIT 138 (19) > 100 % 1223 (89) % 1158 5982
---------------------------------------------------------------------------


Underlying
EBIT :

Bauxite &
Alumina (73) (386) 81 % 159 > (100) % (791) 887

Primary Metal 53 (10) > 100 % 484 (89) % 314 2486

Metal Markets 69 7 > 100 % (39) > 100 % 208 441

Rolled
Products 71 214 (67) % 86 (17) % 640 673

Energy 322 220 47 % 441 (27) % 1459 1883

Other and
eliminations (305) (64) > (100) % 92 > (100) % (672) (389)
---------------------------------------------------------------------------
Underlying
EBIT 138 (19) > 100 % 1223 (89) % 1158 5982
---------------------------------------------------------------------------


Underlying
EBITDA 1216 1114 9 % 2493 (51) % 5687 10497
---------------------------------------------------------------------------


Underlying
income (loss)
from
continuing
operations 58 (37) > 100 % 1035 (94) % 509 3947

Underlying
income (loss)
from
discontinued
operations (59) 17 > (100) % (159) 63 % (5) (1)
---------------------------------------------------------------------------
Underlying net
income (loss) 0 (20) 100 % 876 (100) % 504 3947

Underlying
earnings per
share 0,00 0,00 - 0,42 (100) % 0,26 1,89
---------------------------------------------------------------------------


Net income
(loss) 113 (231) > 100 % (749) > 100 % (1246) 6749

Earnings per
share 0,07 (0,14) > 100 % (0,36) > 100 % (0,61) 3,41
---------------------------------------------------------------------------


Financial
data:
---------------------------------------------------------------------------
Investments 1107 806 37 % 3907 (72) % 3382 47510

Adjusted net
interest-
bearing debt (8271) (13678) 40 % (19895) 58 % (8271) (19895)
---------------------------------------------------------------------------




Key
Operational
information


---------------------------------------------------------------------------
Alumina
production
(kmt) 1397 1441 (3) % 1490 (6) % 5792 5264

Primary
aluminium
production
(kmt) 485 484 - 539 (10) % 1985 1982

Realized
aluminium
price LME
(USD/mt) 1940 2022 (4) % 2439 (20) % 2080 2480

Realized
aluminium
price LME
(NOK/mt) 11069 11856 (7) % 13834 (20) % 12047 13884

Realized
NOK/USD
exchange rate 5,71 5,86 (3) % 5,67 1 % 5,79 5,60

Metal products
sales, total
Hydro (kmt) 731 794 (8) % 804 (9) % 3254 3303

Rolled
Products sales
volumes to
external
market (kmt) 226 228 (1) % 215 5 % 909 929

Power
production
(GWh) 2448 2157 13 % 2706 (10) % 10307 9582
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*********

Certain statements included within this announcement containforward-looking information, including, without limitation, those relatingto (a) forecasts,projections and estimates, (b) statements of management's plans, objectivesandstrategies for Hydro, such as planned expansions, investments or otherprojects,(c) targeted production volumes and costs, capacities or rates, start-upcosts,cost reductions and profit objectives, (d) various expectations aboutfuturedevelopments in Hydro's markets, particularly prices, supply and demand andcompetition, (e) results of operations, (f) margins, (g) growth rates, (h)riskmanagement, as well as (i) statements preceded by "expected", "scheduled","targeted", "planned", "proposed", "intended" or similar statements.

Although we believe that the expectations reflected in such forward-lookingstatements are reasonable, these forward-looking statements are based on anumber of assumptions and forecasts that, by their nature, involve risk anduncertainty. Various factors could cause our actual results to differmaterially from those projected in a forward-looking statement or affecttheextent to which a particular projection is realized. Factors that couldcausethese differences include, but are not limited to: our continued ability toreposition and restructure our upstream and downstream aluminium business;changes in availability and cost of energy and raw materials; global supplyanddemand for aluminium and aluminium products; world economic growth,includingrates of inflation and industrial production; changes in the relative value ofcurrencies and the value of commodity contracts; trends in Hydro's keymarketsand competition; and legislative, regulatory and political factors.

No assurance can be given that such expectations will prove to have beencorrect. Hydro disclaims any obligation to update or revise anyforward-looking statements, whether as a result of new information, futureevents or otherwise.

This information is subject of the disclosure requirements pursuant tosection5-12 of the Norwegian Securities Trading Act.

Q4 report:http://hugin.info/106/R/1677211/546900.pdf

Q4 presentation:http://hugin.info/106/R/1677211/546907.pdf

This announcement is distributed by Thomson Reuters on behalf ofThomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright andother applicable laws; and

(ii) they are solely responsible for the content, accuracy andoriginality of the information contained therein.

Source: Norsk Hydro via Thomson Reuters ONE

[HUG#1677211]

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