Norsk Hydro : Third quarter 2016: Higher aluminium prices, more than offset by currency and seasonality
(Thomson Reuters ONE) -
Hydro's underlying earnings before financial items and tax declined to NOK
1,477 million in the third quarter, down from NOK 1,618 million in the second
quarter. The decrease mainly reflected seasonally lower metal sales and negative
currency effects, partly offset by higher realized aluminium prices.
· Underlying EBIT of NOK 1 477 million
· Higher realized aluminium prices, offset by currency developments
· Record-high alumina production of 6.5 million mt
· Seasonally lower metal sales
· Trial production started at new automotive line in Germany
· Better improvement program on track for 2019 target of NOK 2.9
billion
· Global primary aluminium demand growth expected at 4-5% in 2016
"Demand growth for aluminium remains healthy. We are sticking to our forecast
for global aluminium demand growth of 4-5 percent for 2016 and expect to land in
the higher range of this estimate for the full year," says President and CEO
Svein Richard Brandtzæg. "This comes on the back of higher-than-expected demand
in China and slower restarts of curtailed capacity", says Brandtzæg.
"I'm pleased to see the positive operational development in our bauxite and
alumina production. Both Paragominas and Alunorte produced above nameplate
capacity in the third quarter, with Hydro Alunorte alumina production reaching a
record-high production level. This is a demonstration of long-term dedication by
a highly competent and committed organization in Brazil. We have succeeded in
lifting the bar and will continue these efforts to stabilize production at or
above nameplate capacity," says Brandtzæg.
Underlying EBIT for Bauxite & Alumina decreased compared to second quarter.
While the realized alumina price remained stable, alumina sourcing costs
increased somewhat. Further reduction in raw material consumption and reduced
bauxite costs were offset by negative currency effects, as the Brazilian Real
continued to strengthen against the USD. Annualized production volume at Hydro
Alunorte reached a record 6.5 million mt per year, exceeding name-plate capacity
of 6.3 million mt per year. Hydro Paragominas also increased the production
after lower production last quarter due to ball mill maintenance.
Underlying EBIT for Primary Metal declined in the third quarter. Lower premiums
and volumes, in addition to slightly higher raw material costs and negative
currency effects, were largely offset by higher realized aluminium prices and
lower fixed costs. The second quarter was positively influenced by an insurance
refund of NOK 50 million related to a power outage in Årdal in January 2016, in
addition to a positive effect of NOK 75 million related to a reversal of ICMS
tax accrual on sales of surplus power in Brazil in previous periods.
Underlying EBIT for Metal Markets improved in the third quarter mainly due to
less negative currency and inventory evaluation effects, in addition to improved
results from sourcing and trading activities. Results from remelters declined
mainly due to seasonally lower volumes.
Underlying EBIT for Rolled Products was lower compared to the second quarter of
2016, mainly due to seasonally lower volumes and changes in the product mix. The
Neuss smelter result was higher due to an increase in the all-in metal price.
Underlying EBIT for Energy declined compared to the previous quarter due to
higher production cost and higher area cost, partly offset by higher production.
The higher production cost was driven by seasonally higher property taxes, while
area cost increased mainly due to export restrictions out of Southern Norway
during the quarter.
Underlying EBIT for Sapa decreased compared to the previous quarter, mainly due
to seasonally lower market demand.
During the third quarter Hydro made progress in accordance with plan on its
"Better" improvement ambition targeting NOK 2.9 billion of annual improvements
by 2019.
Hydro's net cash position increased during the third quarter by NOK 0.6 billion
to NOK 5.4 billion at the end of the quarter. Net cash provided by operating
activities amounted to NOK 2.3 billion. Net cash used in investment activities,
excluding short term investments, amounted to NOK 1.5 billion.
Reported earnings before financial items and tax amounted to NOK 1,376 million
in the third quarter. In addition to the factors discussed above, reported EBIT
included net unrealized derivative gains of NOK 100 million and positive metal
effects of NOK 48 million. Reported earnings also included a charge of NOK 124
million related to the demolition of the Kurri Kurri site and an impairment
charge of NOK 140 million related to the decision to divest the Hannover site.
In addition, reported earnings included a net gain of NOK 15 million in Sapa
(Hydro's share net of tax), relating to unrealized derivative gains,
rationalization charges and net foreign exchange gains.
In the previous quarter reported earnings before financial items and tax
amounted to NOK 1,978 million including net unrealized derivative gains of NOK
32 million and positive metal effects of NOK 17 million. Reported EBIT 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 EBIT 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.
Net income amounted to NOK 1,119 million in the third quarter including a net
foreign exchange gain of NOK 358 million mainly reflecting 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 2,077 million 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.
Key financial
information
%change First First
NOK million, Third Second %change Third prior 9 9
except per quarter quarter prior quarter year months months Year
share data 2016 2016 quarter 2015 quarter 2016 2015 2015
-------------------------------------------------------------------------------
Revenue 20,174 20,391 (1) % 21,594 (7) % 60,703 67,320 87,694
Earnings
before
financial
items and tax
(EBIT) 1,376 1,978 (30) % 1,630 (16) % 5,047 7,533 8,258
Items
excluded from
underlying
EBIT 101 (360) >100 % 586 (83) % (451) 557 1,398
-------------------------------------------------------------------------------
Underlying
EBIT 1,477 1,618 (9) % 2,215 (33) % 4,596 8,090 9,656
-------------------------------------------------------------------------------
Underlying
EBIT :
Bauxite &
Alumina 153 174 (12) % 628 (76) % 516 1,889 2,421
Primary Metal 637 702 (9) % 762 (16) % 1,657 4,221 4,628
Metal Markets 117 75 57 % 291 (60) % 358 227 379
Rolled
Products 211 242 (13) % 331 (36) % 701 938 1,142
Energy 285 301 (5) % 191 49 % 983 752 1,105
Other and
eliminations 75 125 (40) % 12 >100 % 380 63 (19)
-------------------------------------------------------------------------------
Underlying
EBIT 1,477 1,618 (9) % 2,215 (33) % 4,596 8,090 9,656
-------------------------------------------------------------------------------
Earnings
before
financial
items, tax,
depreciation
and
amortization
(EBITDA) 2,792 3,222 (13) % 2,808 (1) % 8,922 11,154 13,282
Underlying
EBITDA 2,753 2,862 (4) % 3,394 (19) % 8,331 11,711 14,680
-------------------------------------------------------------------------------
Net income
(loss) 1,119 2,077 (46) % (1,345) >100 % 5,578 1,791 2,333
-------------------------------------------------------------------------------
Underlying
net income
(loss) 958 1,126 (15) % 1,377 (30) % 2,906 5,413 6,709
-------------------------------------------------------------------------------
Earnings per
share 0.53 0.95 (44) % (0.65) >100 % 2.61 0.76 0.99
-------------------------------------------------------------------------------
Underlying
earnings per
share 0.46 0.52 (11) % 0.61 (25) % 1.37 2.39 2.98
-------------------------------------------------------------------------------
Financial
data:
-------------------------------------------------------------------------------
Investments 1,914 1,711 12 % 1,316 45 % 5,596 3,309 5,865
Adjusted net
interest-
bearing debt (8,072) (8,758) 8 % (9,272) 13 % (8,072) (9,272) (8,173)
-------------------------------------------------------------------------------
Key
Operational
information
-------------------------------------------------------------------------------
Bauxite
production
(kmt) 2,777 2,609 6 % 2,735 2 % 8,069 7,101 10,060
Alumina
production
(kmt) 1,635 1,554 5 % 1,498 9 % 4,706 4,385 5,962
Primary
aluminium
production
(kmt) 526 518 2 % 520 1 % 1,559 1,525 2,046
Realized
aluminium
price LME
(USD/mt) 1,612 1,546 4 % 1,685 (4) % 1,552 1,795 1,737
Realized
aluminium
price LME
(NOK/mt) 13,375 12,826 4 % 13,779 (3) % 13,049 14,032 13,813
Realized
USD/NOK
exchange rate 8.30 8.30 - 8.18 1 % 8.41 7.82 7.95
Rolled
Products
sales volumes
to external
market (kmt) 231 238 (3) % 248 (7) % 697 719 948
Sapa sales
volumes 50%
(kmt) 170 183 (7) % 171 - 527 526 682
Power
production
(GWh) 2,946 2,674 10 % 2,839 4 % 8,781 8,012 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
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 because 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 Presentasjon:
http://hugin.info/106/R/2051008/767309.pdf
Q3 Rapport:
http://hugin.info/106/R/2051008/767308.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Norsk Hydro via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 25.10.2016 - 07:00 Uhr
Sprache: Deutsch
News-ID 502466
Anzahl Zeichen: 15430
contact information:
Town:
Oslo
Kategorie:
Business News
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"Norsk Hydro : Third quarter 2016: Higher aluminium prices, more than offset by currency and seasonality"
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