Norsk Hydro: Second quarter 2016: Results up on higher prices and sales, offset by currency
(Thomson Reuters ONE) -
Hydro's underlying earnings before financial items and tax rose to NOK
1,618 million in the second quarter from NOK 1,501 million in the first quarter
2016. The improved results reflected higher realized aluminium and alumina
prices and stronger sales volumes, partly offset by currency developments.
* Underlying EBIT of NOK 1,618 million
* Higher realized alumina and all-in aluminium prices, offset by currency
developments
* Higher aluminium and alumina sales
* Significantly improved Sapa results
* Better improvement program on track for 2019 target of NOK 2.9 billion
* Positive cash flow in quarter with full-year dividend payment
* Global primary aluminium demand growth expected at 4-5%
"We have lifted annual global aluminium demand growth forecast to 4-5 percent
for 2016, up from previous forecast 3-4 percent. Higher-than-expected activity
in China means that we now see primary aluminium demand in China alone to grow
by 5-7 percent in 2016. Globally, we expect a largely balanced aluminium market
for the full year, " says President and CEO Svein Richard Brandtzæg.
"For this quarter, we see that increasing aluminium and alumina prices, along
with lower costs and higher volumes are partly offset by currency developments,"
Brandtzæg says. "I am also pleased to see the continued progress of our
ambitious Better improvement programs, and I am happy to see that we are on
track to reach total improvements of NOK 2.9 billion in 2019."
Underlying EBIT for Bauxite & Alumina decreased compared to first quarter.
Positive effects from higher realized alumina prices, driven by higher alumina
index prices during the quarter, further reduction in raw material consumption,
reduced raw material prices were offset by negative currency effects, as the BRL
strengthened against the USD, and increased other costs. Annualized production
volume at the Alunorte alumina refinery increased, approaching nameplate
capacity of 6.3 million mt per year. The Paragominas bauxite mine had lower
production due to scheduled maintenance of the bauxite ball mill in June.
Underlying EBIT for Primary Metal rose in the second quarter mainly due to
higher realized all-in metal prices, higher volumes, lower carbon costs and
seasonally lower fixed costs. This was partly offset by negative currency
effects. The result in second quarter was also positively influenced by
an insurance refund of NOK 50 million related to a power outage at the Årdal
primary aluminium plant in January, in addition to a positive effect of NOK 75
million related to a reversal of the Brazilian ICMS tax accrual on sales of
surplus power in Brazil in previous periods.
Underlying EBIT for Metal Markets declined in the second quarter mainly due to
negative currency and inventory valuation effects, in addition to somewhat lower
results from the remelters.
Rolled Products underlying EBIT remained little changed compared to the previous
quarter. Positive volume effects were offset by negative currency effects on
margins from a weakening USD versus Euro and declining results in the Neuss
primary aluminium plant mainly due to higher alumina prices.
Underlying EBIT for Energy declined compared to the previous quarter due to
seasonally lower production and higher area cost, partly offset by lower
production cost. The lower cost was mainly driven by transmission costs and
property taxes.
Underlying EBIT for Sapa, a 50/50 aluminium extruder joint venture, rose from
the previous quarter, mainly due to seasonally higher demand and stronger
margins.
Hydro's net cash position increased in the second quarter by NOK 0.8 billion to
NOK 4.8 billion at the end of the quarter. Net cash provided by operating
activities amounted to NOK 3.7 billion. Net cash used in investment activities,
excluding short term investments, amounted to NOK 0.9 billion. Dividends paid
amounted to NOK 2.0 billion in the quarter.
Reported earnings before financial items and tax amounted to NOK 1,978 million
in the second quarter. In addition to the factors discussed above, reported EBIT
included net unrealized derivative gains of NOK 32 million and positive metal
effects of NOK 17 million. Reported earnings also included a charge of NOK 67
million related to environmental commitments in Kurri Kurri, a gain of NOK 342
million for the sale of certain assets in Grenland, including Herøya Industrial
Park, and a negative adjustment of NOK 13 million related to the sale of the
Slim rolling mill in the fourth quarter of 2015. In addition, reported earnings
included a net gain of NOK 49 million in Sapa (Hydro's share net of tax),
relating to unrealized derivative gains and net foreign exchange gains.
In the previous quarter reported earnings before financial items and tax
amounted to NOK 1,693 million including net unrealized derivative gains and
negative metal effects of negative NOK 181 million in total. Reported earnings
also included a negative adjustment of NOK 15 million related to the sale of the
Slim rolling mill in the fourth quarter of 2015. In addition, reported earnings
included a net gain of NOK 26 million for Sapa (Hydro's share net of tax),
mainly relating to unrealized derivative gains.
Net income amounted to NOK 2,077 million in the second quarter including a net
foreign exchange gain of NOK 904 million mainly reflecting the strengthening BRL
versus US dollars affecting US dollar liabilities in Brazil, as well as the
strengthening Norwegian kroner versus Euro affecting liabilities in Euro in
Norway and embedded currency derivatives in power contracts. In the previous
quarter net income was NOK 2,382 million including a reduction in tax expense
and related interest income of NOK 700 million in total following settlement of
a tax case in April 2016. Reported earnings also included a net foreign exchange
gain of NOK 1,032 million mainly reflecting the strengthening BRL versus US
dollars affecting US dollar liabilities in Brazil, as well as the strengthening
Norwegian kroner versus Euro affecting liabilities in Euro in Norway and
embedded currency derivatives in power contracts.
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 2016 2016 quarter 2015 quarter 2016 2015 2015
------------------------------------------------------------------------------
Revenue 20 391 20 138 1 % 22 436 (9) % 40 529 45 726 87 694
Earnings
before
financial
items and tax
(EBIT) 1 978 1 693 17 % 2 698 (27) % 3 672 5 904 8 258
Items
excluded from
underlying >(100)
EBIT (360) (192) (87) % (31) % (552) (29) 1 398
------------------------------------------------------------------------------
Underlying
EBIT 1 618 1 501 8 % 2 667 (39) % 3 119 5 875 9 656
------------------------------------------------------------------------------
Underlying
EBIT:
Bauxite &
Alumina 174 189 (8) % 482 (64) % 363 1 261 2 421
Primary Metal 702 318 >100 % 1 448 (52) % 1 020 3 459 4 628
Metal Markets 75 167 (55) % (89) >100 % 241 (65) 379
Rolled
Products 242 248 (2) % 315 (23) % 491 607 1 142
Energy 301 398 (24) % 179 68 % 699 560 1 105
Other and
eliminations 125 181 (31) % 333 (63) % 306 51 (19)
------------------------------------------------------------------------------
Underlying
EBIT 1 618 1 501 8 % 2 667 (39) % 3 119 5 875 9 656
------------------------------------------------------------------------------
Underlying
EBITDA 2 862 2 716 5 % 3 880 (26) % 5 578 8 317 14 680
------------------------------------------------------------------------------
Net income
(loss) 2 077 2 382 (13) % 2 064 1 % 4 459 3 136 2 333
------------------------------------------------------------------------------
Underlying
net income
(loss) 1 126 822 37 % 1 830 (38) % 1 949 4 036 6 709
------------------------------------------------------------------------------
Earnings per
share 0.95 1.12 (15) % 0.94 1 % 2.08 1.4 0.99
------------------------------------------------------------------------------
Underlying
earnings per
share 0.52 0.39 32 % 0.83 (38) % 0.91 1.78 2.98
------------------------------------------------------------------------------
Financial
data:
------------------------------------------------------------------------------
Investments 1 711 1 970 (13) % 1 192 44 % 3 681 1 993 5 865
Adjusted net
interest- (8
bearing debt (8758) (9 206) 5 % (11000) 20 % (8758) (11000) 173)
------------------------------------------------------------------------------
Key
Operational
information
------------------------------------------------------------------------------
Bauxite
production
(kmt) 2 609 2 682 (3) % 2 232 17 % 5 292 4 366 10 060
Alumina
production
(kmt) 1 554 1 517 2 % 1 437 8 % 3 071 2 888 5 962
Primary
aluminium
production
(kmt) 518 514 1 % 509 2 % 1 032 1 005 2 046
Realized
aluminium
price LME
(USD/mt) 1 546 1 497 3 % 1 803 (14) % 1 522 1 851 1 737
Realized
aluminium
price LME
(NOK/mt) 12 826 12 950 (1) % 13 923 (8) % 12 887 14 160 13 813
Realized
USD/NOK
exchange rate 8.30 8.65 (4) % 7.72 7 % 8.47 7.65 7.95
Rolled
Products
sales volumes
to external
market (kmt) 238 229 4 % 243 (2) % 467 471 948
Sapa sales
volumes (50%)
(kmt) 183 174 5 % 179 2 % 358 355 682
Power
production
(GWh) 2 674 3 160 (15) % 2 103 27 % 5 835 5 173 10 894
------------------------------------------------------------------------------
Investor contact
Contact Stian Hasle
Cellular +47 97736022
E-mail Stian.Hasle(at)hydro.com
Press contact
Contact Halvor Molland
Cellular +47 92979797
E-mail Halvor.Molland(at)hydro.com
Cautionary 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.
Q2 Report:
http://hugin.info/106/R/2029785/754867.pdf
Q2 Presentation:
http://hugin.info/106/R/2029785/754868.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#2029785]
Unternehmensinformation / Kurzprofil:
Datum: 21.07.2016 - 07:01 Uhr
Sprache: Deutsch
News-ID 484504
Anzahl Zeichen: 15025
contact information:
Town:
Oslo
Kategorie:
Business News
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