Norsk Hydro: Third quarter 2015: Weaker prices, strong rolled product sales and record bauxite production
(Thomson Reuters ONE) -
Hydro's underlying earnings before financial items and tax declined
to NOK 2,215 million in the third quarter from NOK 2,667 million in
the second quarter of 2015. Weaker alumina and aluminium prices and premiums
weighed on results, while strong rolled products sales and record bauxite
production contributed positively in the quarter.
* Underlying EBIT of NOK 2,215 million
* Historically low implied alumina cost on record bauxite production and
currency
* Lower realized alumina and all-in aluminium prices
* Strong downstream development in seasonally weaker quarter
* LoI signed with Vale to raise MRN ownership to 45%
* 2015 global primary aluminium demand outlook ~4%
Underlying EBIT for Bauxite & Alumina increased compared to the second quarter
primarily due to a weaker Brazilian Real and increased production at Paragominas
and Alunorte. This was partly offset by lower LME-linked and index alumina
prices.
"Bauxite production reached record-levels this quarter, reflecting the continued
improvement efforts made over the last years in Paragominas. We continue to
strengthen our bauxite operation, and have signed a Letter of Intent with
Brazilian mining company Vale for the possible acquisition of Vale's 40%
interest in the Brazilian bauxite producer MRN," says President an CEO Svein
Richard Brandtzæg. The record bauxite production, together with currency
effects, also gave a historically low implied alumina cost for the quarter.
Primary Metal underlying EBIT declined in the third quarter due
to lower realized premiums and aluminium prices, partly offset by stronger USD
and somewhat higher sales volumes.
Underlying EBIT for Metal Markets improved in the third quarter
driven by improved results from sourcing and trading activities in addition to
positive currency and inventory valuation effects. This was partly offset by
lower results from remelt operations due to seasonally lower volume and lower
margins in Europe.
Rolled Products underlying EBIT improved compared with the second quarter of
2015 driven by higher shipments and seasonally lower operating cost. The
positive effects were partly offset by a lower contribution from the Rheinwerk
smelter due to lower all-in metal prices.
"I am pleased to see a stronger quarter in Rolled Products, above what is normal
for the third quarter, backed by increased demand for general engineering
products," says Brandtzæg.
Underlying EBIT for Energy increased compared to the second quarter, mainly due
to high production in third quarter influenced by the delayed spring thaw in the
Norwegian mountains. This was largely offset by lower spot
prices and higher property taxes.
Underlying EBIT for Sapa decreased compared to the previous quarter, due to
seasonally lower sales volumes in Europe. This was partly offset by strong North
American market developments with stable metal premiums, while the second
quarter results were impacted negatively by sharply falling metal premiums in
North America. Improvement programs progressing ahead of plan across the
organization also contributed to the results for the quarter.
Operating cash flow amounted to NOK 4.5 billion for the third quarter, including
a working capital reduction of NOK 2.1 billion. Cash used for investment
activities amounted to NOK 1.2 billion. Hydro's net cash position increased
during the third quarter by NOK 2.6 billion to NOK 3.3 billion at the end of
the quarter, also affected by currency translation effects of around NOK
0.6 billion mainly due to the strengthening USD compared to NOK.
Reported earnings before financial items and tax amounted to NOK 1,630 million
in the third quarter. In addition to the factors discussed above, reported EBIT
included net unrealized derivative losses and negative metal effects of NOK
520 million in total. Reported earnings also included a charge of NOK
65 million (Hydro's share) for Sapa net of tax, including NOK 48 million
relating to restructuring charges.
In the previous quarter reported earnings before financial items and tax
amounted to NOK 2,698 million including 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, including NOK 106 million relating
to restructuring charges.
Net income amounted to negative NOK 1,345 million in the third quarter including
a net foreign exchange loss of NOK 3,205 million mainly due to unrealized
currency losses on US dollar debt, in particular in Brazil, and embedded
derivatives in power contracts denominated in EUR. In the previous quarter, net
income was NOK 2,064 million including a net foreign exchange gain of NOK
346 million mainly due to unrealized currency gains on US dollar debt in Brazil.
Key
financial
information
% %change First
NOK million, Third Second change Third prior 9 First 9
except per quarter quarter prior quarter year months months Year
share data 2015 2015 quarter 2014 quarter 2015 2014 2014
----------------------------------------------------------------------------------
Revenue 21,594 22,436 (4) % 19,698 10 % 67,320 56,251 77,907
Earnings
before
financial
items and
tax (EBIT) 1,630 2,698 (40) % 1,937 (16) % 7,533 3,379 5,674
Items
excluded
from
underlying
EBIT 586 (31) > 100 % (447) >100 % 557 (573) 18
----------------------------------------------------------------------------------
Underlying
EBIT 2,215 2,667 (17) % 1,490 49 % 8,090 2,806 5,692
----------------------------------------------------------------------------------
Underlying
EBIT :
Bauxite &
Alumina 628 482 30 % (26) >100 % 1,889 (583) (55)
Primary
Metal 762 1,448 (47) % 1,216 (37) % 4,221 1,948 3,937
Metal
Markets 291 (89) >100 % 171 70 % 227 412 634
Rolled
Products 331 315 5 % 243 36 % 938 601 698
Energy 191 179 7 % 234 (18) % 752 838 1,197
Other and
eliminations 12 333 (96) % (349) >100 % 63 (409) (717)
----------------------------------------------------------------------------------
Underlying
EBIT 2,215 2,667 (17) % 1,490 49 % 8,090 2,806 5,692
----------------------------------------------------------------------------------
Underlying
EBITDA 3,394 3,880 (13) % 2,615 30 % 11,711 6,129 10,299
----------------------------------------------------------------------------------
Net income >(100) >(100)
(loss) (1,345) 2,064 % 665 % 1,791 1,396 1,228
----------------------------------------------------------------------------------
Underlying
net income
(loss) 1,377 1,830 (25) % 1,043 32 % 5,413 1,748 3,728
----------------------------------------------------------------------------------
Earnings per >(100) >(100)
share (0.65) 0.94 % 0.29 % 0.76 0.57 0.39
----------------------------------------------------------------------------------
Underlying
earnings per
share 0.61 0.83 (27) % 0.43 43 % 2.39 0.72 1.55
----------------------------------------------------------------------------------
Financial
data:
----------------------------------------------------------------------------------
Investments 1,316 1,192 10 % 889 48 % 3,309 2,176 3,625
Adjusted net
interest-
bearing debt (9,272) (11,000) 16 % (14,061) 34 % (9,272) (14,061) (13,587)
----------------------------------------------------------------------------------
Key Operational
information
----------------------------------------------------------------------------------
Alumina
production
(kmt) 1,498 1,437 4 % 1,478 1 % 4,385 4,432 5,933
Primary
aluminium
production
(kmt) 520 509 2 % 487 7 % 1,525 1,459 1,958
Realized
aluminium
price LME
(USD/mt) 1,685 1,803 (7) % 1,906 (12) % 1,795 1,803 1,850
Realized
aluminium
price LME
(NOK/mt) 13,779 13,923 (1) % 11,909 16 % 14,032 11,075 11,624
Realized
NOK/USD
exchange
rate 8.18 7.72 6 % 6.25 31 % 7.82 6.14 6.28
Metal
products
sales. total
Hydro (kmt) 809 830 (3) % 804 1 % 2,406 2,505 3,274
Rolled
Products
sales
volumes to
external
market (kmt) 248 243 2 % 244 2 % 719 732 946
Power
production
(GWh) 2,839 2,103 35 % 2,170 31 % 8,012 7,382 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.
Q3 Report:
http://hugin.info/106/R/1960205/714503.pdf
Q3 Presentation:
http://hugin.info/106/R/1960205/714492.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#1960205]
Unternehmensinformation / Kurzprofil:
Datum: 21.10.2015 - 07:00 Uhr
Sprache: Deutsch
News-ID 428330
Anzahl Zeichen: 13773
contact information:
Town:
Oslo
Kategorie:
Business News
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