Hydro's underlying earnings before financial items and tax
decreased to NOK 2 446 million in the third quarter, down from NOK
2 930 million in the second quarter. The decrease mainly reflects
higher raw material costs and negative currency effects.
- Underlying EBIT of NOK 2 446 million
- Negative result effects from raw material costs and USD
depreciation
- Weak Rolled Products results on continued operational issues
and negative currency effect
- Acquisition of Sapa completed on October 2, integration
progressing according to plan
- Better improvement program on track for 2019 target of NOK 2.9
billion, despite 2017 setback
- Karmøy Technology Pilot on time and budget, expected
start-up Q4 2017
- Positive market sentiment on announced Chinese closures, global
market expected largely balanced in 2017
"We have lifted our global demand estimate for 2017 to 5-6%,
indicating a continued strong demand for aluminium. There is a
positive market sentiment for aluminium, mainly driven by
curtailments of primary production in China, which have
supported the market balance in the quarter," says President and
CEO Svein Richard Brandtzæg.
"This quarter marks a new chapter in our history, adding
Extruded Solutions as a fifth business area in Hydro. We
are now 35,000-people strong, with 150 sites all over the
world and 30,000 customers throughout the entire value chain
of aluminium. We have a global reach as well as being very
close to our customers and all the communities we serve," says
Brandtzæg.
"We now have the best-possible platform for further growth and
opportunities, innovation and product development," says
Brandtzæg.
Underlying EBIT for Bauxite & Alumina decreased compared to
the second quarter. Higher bauxite and caustic prices, negative
currency effects and increased depreciation, primarily in
Paragominas, were partly offset by improved consumption factors.
The ongoing ramp-up process of the new press filter operation
caused additional cost at the alumina refinery.
Underlying EBIT for Primary Metal declined in the third quarter
due to negative currency effects, as the NOK strengthened against
the USD, in addition to seasonally lower volumes and higher carbon
costs. This was partly offset by lower alumina and fixed costs.
Underlying EBIT for Metal Markets declined in the third quarter,
mainly due to negative inventory valuation and less positive
currency effects. Results from remelters declined in the third
quarter driven by lower sales volumes in Europe.
Underlying EBIT for Rolled Products in the third quarter
improved slightly compared to the second quarter of 2017. The
increase was primarily due to an accrual for employee compensation
recognized in the second quarter. This was partly offset by
negative currency developments and seasonal effects including
summer shutdown in certain plants. The Neuss smelter result was on
same level compared to prior quarter.
Underlying EBIT for Energy increased compared to the previous
quarter, mainly due to improved commercial results and higher
production, partly offset by periodically higher property tax.
Underlying EBIT for Sapa decreased compared to the previous
quarter, in line with general seasonality in the extrusion
business.
Due to the ongoing performance challenges in Rolled Products,
progress on Hydro's "Better" improvement program is behind plan.
While Hydro does not expect to reach the year end target of NOK 500
million, the delay is not expected to impact the ability to reach
the 2019 target of NOK 2.9 billion.
Hydro's net cash position increased by NOK 1.7 billion to NOK
7.7 billion at the end of the quarter. Net cash provided by
operating activities amounted to NOK 3.0 billion. Net cash used in
investment activities, excluding short term investments, amounted
to NOK 1.3 billion.
Reported earnings before financial items and tax amounted to NOK
2,323 million for the third quarter. In addition to the factors
discussed above, reported EBIT included net unrealized derivative
gains of NOK 23 million and negative metal effects of NOK 151
million.
Net income amounted to NOK 2,184 million in the third quarter
including a reduction in tax expense and related interest income of
NOK 125 million in total following a closed tax case in September
2017. Net income also includes net foreign exchange gains of NOK
520 million, mainly unrealized, reflecting a weakening of USD
against BRL affecting US dollar debt in Brazil, while the weakening
of EUR forward rates against NOK resulted in an unrealized gain on
the embedded derivatives in power contracts denominated in EUR.
Key
financial information NOK million, except per share data |
Third quarter 2017 |
Second quarter 2017 |
Change prior quarter |
Third quarter 2016 |
Change prior year quarter |
First 9 months 2017 |
First 9 months 2016 |
Year 2016 |
|
|
|
|
|
|
|
|
|
Revenue |
22,799 |
24,591 |
(7)
% |
20,174 |
13
% |
70,416 |
60,703 |
81,953 |
Earnings before
financial items and tax (EBIT) |
2,323 |
2,946 |
(21)
% |
1,376 |
69
% |
7,678 |
5,047 |
7,011 |
Items excluded from
underlying EBIT |
123 |
(16) |
>100
% |
101 |
21
% |
(18) |
(451) |
(586) |
Underlying EBIT |
2,446 |
2,930 |
(17) % |
1,477 |
66 % |
7,660 |
4,596 |
6,425 |
|
|
|
|
|
|
|
|
|
Underlying EBIT : |
|
|
|
|
|
|
|
|
Bauxite &
Alumina |
413 |
662 |
(38)
% |
153 |
>100
% |
1,831 |
516 |
1,227 |
Primary Metal |
1,298 |
1,486 |
(13)
% |
637 |
>100
% |
3,684 |
1,657 |
2,258 |
Metal Markets |
91 |
244 |
(63)
% |
117 |
(22)
% |
359 |
358 |
510 |
Rolled Products |
95 |
84 |
12
% |
211 |
(55)
% |
285 |
701 |
708 |
Energy |
368 |
284 |
30
% |
285 |
29
% |
1,075 |
983 |
1,343 |
Other and
eliminations |
181 |
170 |
7
% |
75 |
>100
% |
426 |
380 |
380 |
Underlying EBIT |
2,446 |
2,930 |
(17) % |
1,477 |
66 % |
7,660 |
4,596 |
6,425 |
|
|
|
|
|
|
|
|
|
Earnings before
financial items, tax, depreciation and amortization (EBITDA) |
3,766 |
4,335 |
(13)
% |
2,792 |
35
% |
11,863 |
8,922 |
12,485 |
Underlying EBITDA |
3,889 |
4,319 |
(10) % |
2,753 |
41 % |
11,845 |
8,331 |
11,474 |
|
|
|
|
|
|
|
|
|
Net
income (loss) |
2,184 |
1,562 |
40
% |
1,119 |
95
% |
5,585 |
5,578 |
6,586 |
Underlying net income (loss) |
1,785 |
2,214 |
(19) % |
958 |
86 % |
5,580 |
2,906 |
3,875 |
|
|
|
|
|
|
|
|
|
Earnings
per share |
1.00 |
0.73 |
37 % |
0.53 |
88 % |
2.59 |
2.61 |
3.13 |
Underlying earnings per share |
0.82 |
1.04 |
(21) % |
0.46 |
80 % |
2.61 |
1.37 |
1.83 |
|
|
|
|
|
|
|
|
|
Financial
data: |
|
|
|
|
|
|
|
|
Investments |
1,424 |
1,420 |
0 % |
1,914 |
(26) % |
4,216 |
5,596 |
9,137 |
Adjusted net cash
(debt) |
(2,976) |
(5,146) |
42
% |
(8,072) |
63
% |
(2,976) |
(8,072) |
(5,598) |
|
|
|
|
|
|
|
|
|
Key
Operational information |
Third quarter 2017 |
Second quarter 2017 |
Change prior quarter |
Third quarter 2016 |
Change prior year quarter |
First 9 months 2017 |
First 9 months 2016 |
Year 2016 |
Bauxite production
(kmt) |
3,043 |
2,943 |
3
% |
2,777 |
10
% |
8,386 |
8,069 |
11,132 |
Alumina production
(kmt) |
1,605 |
1,576 |
2
% |
1,635 |
(2)
% |
4,704 |
4,706 |
6,341 |
Primary aluminium
production (kmt) |
527 |
523 |
1
% |
526 |
0
% |
1,566 |
1,559 |
2,085 |
Realized aluminium
price LME (USD/mt) |
1,921 |
1,902 |
1
% |
1,612 |
19
% |
1,859 |
1,552 |
1,574 |
Realized aluminium
price LME (NOK/mt) |
15,496 |
16,265 |
(5)
% |
13,375 |
16
% |
15,510 |
13,049 |
13,193 |
Realized USD/NOK
exchange rate |
8.07 |
8.55 |
(6)
% |
8.30 |
(3)
% |
8.35 |
8.41 |
8.38 |
Rolled Products sales
volumes to external market (kmt) |
236 |
239 |
(1)
% |
231 |
3
% |
716 |
697 |
911 |
Sapa sales volumes
(kmt) |
170 |
180 |
(6)
% |
170 |
0
% |
527 |
527 |
682 |
Power
production (GWh) |
2,509 |
2,369 |
6 % |
2,946 |
(15) % |
7,746 |
8,781 |
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/392651cb-8b33-4c60-99a6-131a0e8659c6
Attachments:
http://www.globenewswire.com/NewsRoom/AttachmentNg/1285bcba-f3f9-48b2-a39e-400d66806882
Norsk Hydro (LSE:NHY)
Historical Stock Chart
From Apr 2024 to May 2024
Norsk Hydro (LSE:NHY)
Historical Stock Chart
From May 2023 to May 2024