Norsk Hydro: Second quarter 2015: Record downstream earnings, upstream down on weaker prices
(Thomson Reuters ONE) -
Hydro's underlying earnings before financial items and tax declined to NOK
2,667 million in the second quarter from NOK 3,208 million in the first quarter
of 2015, mainly reflecting lower aluminium prices and premiums. Stronger sales
volumes lifted downstream results to the highest level since Hydro became a pure
aluminium company in 2007.
* Underlying EBIT of NOK 2,667 million
* Record downstream results on seasonally stronger sales
* Lower realized alumina and all-in aluminium prices
* New ICMS tax-framework in place
* Long-term power sourcing secured for Rheinwerk
* Continued challenging global market balance
* 2015 global primary aluminium demand growth ~5%
"Results this quarter are affected by weaker prices, but I am pleased to see
demand growing and aluminium taking over as the preferred metal in more and more
applications, contributing to record results in our downstream operations," says
President and CEO Svein Richard Brandtzæg.
Underlying EBIT for Bauxite and Alumina decreased in the second quarter
reflecting lower LME-linked alumina prices, a decline in alumina index prices
and lower index based sales volumes.
"We are pleased to have agreed on a long-term ICMS framework for Hydro's
operations in Pará, which is fundamental to our ambition to develop robust and
viable operations in Pará and to be an enabler for sustainable growth in the
region," says Brandtzæg.
Primary Metal underlying EBIT declined in the second quarter, mainly due to
lower realized aluminium prices and premiums.
Underlying EBIT for Metal Markets declined in the second quarter impacted by
higher negative currency and inventory valuation effects. Sourcing and trading
operations continued to incur underlying losses, reflecting the further fall in
standard ingot premiums. Results from remelt operations improved mainly due to
higher margins.
"Improved results in Rolled Products and Sapa are partially offsetting the
effect of a challenging upstream market. The rapidly changing market conditions
demonstrate the importance of our company-wide improvement programs, where the
combined efforts strengthen our bottom line," says Brandtzæg.
Rolled Products delivered improved underlying EBIT mainly driven by seasonally
higher shipments and somewhat better operating margins. Results were negatively
influenced by a decrease in the contribution from the Rheinwerk smelter and
negative currency developments.
Underlying EBIT for Energy declined compared to the first quarter, mainly due to
seasonally lower production also influenced by the delayed spring thaw in the
Norwegian mountains.
Underlying EBIT for Sapa increased compared to the previous quarter, due to
seasonally higher sales volumes, strong North American market development, as
well as improvement programs progressing ahead of plan across the organization.
The second quarter results were also negatively affected by sharply falling
metal premiums in North America.
Operating cash flow amounted to NOK 4.2 billion for the second quarter. Cash
used for investment activities amounted to NOK 1.2 billion. Dividends paid
during the quarter amounted to NOK 2.0 billion. Hydro's net cash position
amounted to NOK 0.7 billion at the end of the second quarter.
Reported earnings before financial items and tax amounted to NOK 2,698 million
in the second quarter. In addition to the factors discussed above, reported EBIT
included net unrealized derivative gains and positive metal effects of NOK 132
million in total and a compensation of NOK 37 million relating to insurance
proceeds. Reported earnings also included a charge of NOK 139 million (Hydro's
share) for Sapa net of tax, including NOK 106 million relating to restructuring
charges.
In the previous quarter reported earnings before financial items and tax
amounted to NOK 3,206 million including net unrealized derivative gains and
positive metal effects of NOK 72 million in total. Reported earnings also
included a charge of NOK 74 million (Hydro's share) for Sapa mainly relating to
unrealized derivative losses.
Net income amounted to NOK 2,064 million in the second quarter including a net
foreign exchange gain of NOK 346 million due to unrealized currency gains on US
dollar debt mainly in Brazil. In the previous quarter, net income was NOK 1,072
million including a net foreign exchange loss of NOK 1,587 million mainly due to
the strengthening of the USD.
Key
financial
information
%change
NOK million, Second First %change Second prior First First
except per quarter quarter prior quarter year half half Year
share data 2015 2015 quarter 2014 quarter 2015 2014 2014
------------------------------------------------------------------------------------
Revenue 22,436 23,290 (4) % 18,272 23 % 45,726 36,553 77,907
Earnings
before
financial
items and
tax (EBIT) 2,698 3,206 (16) % 620 >100 % 5,904 1,442 5,674
Items
excluded
from
underlying >(100)
EBIT (31) 2 % (75) 59 % (29) (126) 18
------------------------------------------------------------------------------------
Underlying
EBIT 2,667 3,208 (17) % 544 >100 % 5,875 1,316 5,692
------------------------------------------------------------------------------------
Underlying
EBIT:
Bauxite &
Alumina 482 780 (38) % (269) >100 % 1,261 (557) (55)
Primary
Metal 1,448 2,012 (28) % 420 >100 % 3,459 732 3,937
Metal >(100) >(100)
Markets (89) 24 % 100 % (65) 241 634
Rolled
Products 315 292 8 % 177 78 % 607 358 698
Energy 179 382 (53) % 169 6 % 560 603 1,197
Other and
eliminations 333 (281) >100 % (52) >100 % 51 (61) (717)
------------------------------------------------------------------------------------
Underlying
EBIT 2,667 3,208 (17) % 544 >100 % 5,875 1,316 5,692
------------------------------------------------------------------------------------
Underlying
EBITDA 3,880 4,437 (13) % 1,653 >100 % 8,317 3,514 10,299
------------------------------------------------------------------------------------
Net income
(loss) 2,064 1,072 93 % 269 >100 % 3,136 730 1,228
------------------------------------------------------------------------------------
Underlying
net income
(loss) 1,830 2,206 (17) % 318 >100 % 4,036 705 3,728
------------------------------------------------------------------------------------
Earnings per
share 0.94 0.46 >100 % 0.09 >100 % 1.40 0.28 0.39
Underlying
earnings per
share 0.83 0.95 (12) % 0.13 >100 % 1.78 0.29 1.55
------------------------------------------------------------------------------------
Financial
data:
------------------------------------------------------------------------------------
Investments 1,192 802 49 % 740 61 % 1,993 1,286 3,625
Adjusted net
interest-
bearing debt (11,000) (13,478) 18 % (13,551) 19 % (11,000) (13,551) (13,587)
------------------------------------------------------------------------------------
Key
Operational
information
------------------------------------------------------------------------------------
Alumina
production
(kmt) 1,437 1,451 (1) % 1,526 (6) % 2,888 2,954 5,933
Primary
aluminium
production
(kmt) 509 497 2 % 488 4 % 1,005 972 1,958
Realized
aluminium
price LME
(USD/mt) 1,803 1,897 (5) % 1,762 2 % 1,851 1,755 1,850
Realized
aluminium
price LME
(NOK/mt) 13,923 14,383 (3) % 10,660 31 % 14,160 10,682 11,624
Realized
NOK/USD
exchange
rate 7.72 7.58 2 % 6.05 28 % 7.65 6.09 6.28
Metal
products
sales, total
Hydro (kmt) 830 767 8 % 833 - 1,597 1,701 3,274
Rolled
Products
sales 243 227 7 % 245 (1) % 471 488 946
volumes to
external
market (kmt)
Power
production
(GWh) 2,103 3,071 (32) % 2,248 (6) % 5,173 5,212 10,206
------------------------------------------------------------------------------------
Investor contact
Contact Pål Kildemo
Cellular +47 97096711
E-mail Pal.Kildemo(at)hydro.com
Press contact
Contact Halvor Molland
Cellular +47 92979797
E-mail Halvor.Molland(at)hydro.com
Certain statements included within this announcement contain forward-looking
information, including, without limitation, those relating to (a) forecasts,
projections and estimates, (b) statements of management's plans, objectives and
strategies for Hydro, such as planned expansions, investments or other projects,
(c) targeted production volumes and costs, capacities or rates, startup 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, 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-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 aluminium business; 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.
Q2 Report:
http://hugin.info/106/R/1939986/700294.pdf
Q2 Presentation:
http://hugin.info/106/R/1939986/700251.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Norsk Hydro via GlobeNewswire
[HUG#1939986]
Unternehmensinformation / Kurzprofil:
Datum: 21.07.2015 - 06:59 Uhr
Sprache: Deutsch
News-ID 407938
Anzahl Zeichen: 13305
contact information:
Town:
Oslo
Kategorie:
Business News
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