Hydro reports preliminary 2010 pro forma financials after Hydro-Vale transaction
(Thomson Reuters ONE) -
Norsk Hydro ASA is reporting preliminary unaudited pro forma condensed combined
financial information for 2010 after completing the acquisition of Vale S.A.'s
aluminium business on February 28, 2011. The preliminary pro forma financials
are released to provide further details on the acquired businesses ahead of
Hydro's first quarter results 2011 to be released on April 29.
In the transaction Hydro acquired from Vale 60 percent in the Paragominas
bauxite mine, 57 percent in the Alunorte alumina refinery, 51 percent in the
Albras aluminium smelter and 61 percent in the CAP alumina refinery project.
Hydro already had a 34 percent stake in Alunorte and 20 percent in CAP prior to
the transaction.
New reporting structure
Effective first quarter 2011 Hydro will have the following reporting segments:
* Bauxite & Alumina
* Primary Metal
* Metal Markets
* Rolled Products
* Extruded Products
* Energy
* Other and Eliminations
The new Bauxite & Alumina segment will include Paragominas, Alunorte, CAP and
related commercial activities. The Primary Metal segment will include Hydro's
current aluminium smelting activities and Albras.
All the acquired assets will be fully consolidated in Hydro's results starting
March 1, 2011. Reported and underlying results for first quarter 2011 will
therefore include two months reflecting a 34 percent stake in Alunorte and 20
percent in CAP, both reported as equity accounted investments, and one month
where the acquired assets are fully consolidated.
Hydro will provide comparable pro forma financials for first quarter 2011 on
April 29.
Preliminary purchase price allocation
Hydro's preliminary purchase price allocation indicates an annual excess value
depreciation of about NOK 1.0 billion pre-tax and NOK 0.6 billion after tax. The
pre-tax excess value depreciation has been reduced from NOK 1.5 billion, which
was indicated in Hydro's prospectus published in June 2010 in connection with
Hydro's rights issue.
Hydro's pre-transaction 34 percent stake in Alunorte and 20 percent stake in CAP
will be revalued to the fair value of the stakes in these assets. This is
expected to result in a significant revaluation gain, which in the prospectus
from June 2010 was estimated to be about NOK 5.2 billion. An updated number for
this gain will be recognized in Hydro's reported results for the first quarter.
The put and call arrangement for the remaining 40 percent interest in
Paragominas is considered to transfer the economic risks and rewards of
ownership to Hydro also for these shares. Paragominas is therefore accounted for
based on the assumption that Hydro is the economic owner of 100 percent of the
company, hence without minority interest.
Pro forma adjustments
The pro forma information intends to illustrate how Hydro's results of
operations may have appeared had the transaction been completed prior to January
1, 2010.
Basis for the pro forma information:
Hydro's previous activities are reflected in Hydro's historic financial
information. The effects of Hydro's previous ownership interests in Alunorte and
CAP accounted for under the equity method are excluded from the pro forma
combined figures. For Vale's aluminium assets, the sources for the pro forma
information is partly carve-out information provided by Vale, and partly
accounts and records in the entities acquired by Hydro.
Adjustments are made in the pro forma combined financial information to reflect
how the fair value adjustments affect the income statement. These adjustments
are carried back to prior periods as follows:
* Depreciation of excess values allocated to property, plant and equipment.
* Effect of unfavorable sales contracts for alumina representing a credit to
revenue.
* Interest on the cash purchase price as well as calculated interest expense
on the deferred payment included in the put/call arrangement reflecting the
mix of cash and equity consideration.
This unaudited pro forma condensed combined financial information is preliminary
and provided for illustrative purposes only. The information does not purport to
represent what the actual consolidated results of operations or the consolidated
financial position of Hydro would have been had the business been operated as
one combined group for the period, nor is it necessarily indicative of future
consolidated results of operations or consolidated financial position. The
purchase price allocation and resulting excess value depreciation may be changed
until 12 months after the closing of the transaction.
Preliminary pro forma segment financial information and income statements for
the quarters in 2010 and full year 2010 are attached.
Investor contact
Contact: Stefan Solberg
Cellular: +47 91727528
E-mail: Stefan.Solberg(at)hydro.com
Contact Stian Hasle
Cellular +47 97736022
E-mail Stian.Hasle(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, 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, 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 of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
Pro forma financials 2010:
http://hugin.info/106/R/1506743/441535.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters 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 Thomson Reuters ONE
[HUG#1506743]
Unternehmensinformation / Kurzprofil:
Datum: 15.04.2011 - 08:00 Uhr
Sprache: Deutsch
News-ID 53577
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contact information:
Town:
Oslo
Kategorie:
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