Norsk Hydro: Results down on increased raw material costs and currency
(Thomson Reuters ONE) -
Hydro's underlying earnings before financial items and tax decreased to NOK
2 446 million in the third quarter, down from NOK 2 930 million in the second
quarter. The decrease mainly reflects higher raw material costs and negative
currency effects.
* Underlying EBIT of NOK 2 446 million
* Negative result effects from raw material costs and USD depreciation
* Weak Rolled Products results on continued operational issues and negative
currency effect
* Acquisition of Sapa completed on October 2, integration progressing
according to plan
* Better improvement program on track for 2019 target of NOK 2.9 billion,
despite 2017 setback
* Karmøy Technology Pilot on time and budget, expected start-up Q4 2017
* Positive market sentiment on announced Chinese closures, global market
expected largely balanced in 2017
"We have lifted our global demand estimate for 2017 to 5-6%, indicating a
continued strong demand for aluminium. There is a positive market sentiment for
aluminium, mainly driven by curtailments of primary production in China,
which have supported the market balance in the quarter," says President and CEO
Svein Richard Brandtzæg.
"This quarter marks a new chapter in our history, adding Extruded Solutions as a
fifth business area in Hydro. We are now 35,000-people strong, with 150 sites
all over the world and 30,000 customers throughout the entire value chain of
aluminium. We have a global reach as well as being very close to our customers
and all the communities we serve," says Brandtzæg.
"We now have the best-possible platform for further growth and opportunities,
innovation and product development," says Brandtzæg.
Underlying EBIT for Bauxite & Alumina decreased compared to the second quarter.
Higher bauxite and caustic prices, negative currency effects and increased
depreciation, primarily in Paragominas, were partly offset by improved
consumption factors. The ongoing ramp-up process of the new press filter
operation caused additional cost at the alumina refinery.
Underlying EBIT for Primary Metal declined in the third quarter due to negative
currency effects, as the NOK strengthened against the USD, in addition to
seasonally lower volumes and higher carbon costs. This was partly offset by
lower alumina and fixed costs.
Underlying EBIT for Metal Markets declined in the third quarter, mainly due to
negative inventory valuation and less positive currency effects. Results from
remelters declined in the third quarter driven by lower sales volumes in Europe.
Underlying EBIT for Rolled Products in the third quarter improved slightly
compared to the second quarter of 2017. The increase was primarily due to an
accrual for employee compensation recognized in the second quarter. This was
partly offset by negative currency developments and seasonal effects including
summer shutdown in certain plants. The Neuss smelter result was on same level
compared to prior quarter.
Underlying EBIT for Energy increased compared to the previous quarter, mainly
due to improved commercial results and higher production, partly offset by
periodically higher property tax.
Underlying EBIT for Sapa decreased compared to the previous quarter, in line
with general seasonality in the extrusion business.
Due to the ongoing performance challenges in Rolled Products, progress on
Hydro's "Better" improvement program is behind plan. While Hydro does not expect
to reach the year end target of NOK 500 million, the delay is not expected to
impact the ability to reach the 2019 target of NOK 2.9 billion.
Hydro's net cash position increased by NOK 1.7 billion to NOK 7.7 billion at the
end of the quarter. Net cash provided by operating activities amounted to NOK
3.0 billion. Net cash used in investment activities, excluding short term
investments, amounted to NOK 1.3 billion.
Reported earnings before financial items and tax amounted to NOK 2,323 million
for the third quarter. In addition to the factors discussed above, reported EBIT
included net unrealized derivative gains of NOK 23 million and negative metal
effects of NOK 151 million.
Net income amounted to NOK 2,184 million in the third quarter including a
reduction in tax expense and related interest income of NOK 125 million in total
following a closed tax case in September 2017. Net income also includes net
foreign exchange gains of NOK 520 million, mainly unrealized, reflecting a
weakening of USD against BRL affecting US dollar debt in Brazil, while the
weakening of EUR forward rates against NOK resulted in an unrealized gain on the
embedded derivatives in power contracts denominated in EUR.
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 2017 2017 quarter 2016 quarter 2017 2016 2016
-------------------------------------------------------------------------------
Revenue 22,799 24,591 (7) % 20,174 13 % 70,416 60,703 81,953
Earnings
before
financial
items and tax
(EBIT) 2,323 2,946 (21) % 1,376 69 % 7,678 5,047 7,011
Items
excluded from
underlying
EBIT 123 (16) >100 % 101 21 % (18) (451) (586)
-------------------------------------------------------------------------------
Underlying
EBIT 2,446 2,930 (17) % 1,477 66 % 7,660 4,596 6,425
-------------------------------------------------------------------------------
Underlying
EBIT :
Bauxite &
Alumina 413 662 (38) % 153 >100 % 1,831 516 1,227
Primary Metal 1,298 1,486 (13) % 637 >100 % 3,684 1,657 2,258
Metal Markets 91 244 (63) % 117 (22) % 359 358 510
Rolled
Products 95 84 12 % 211 (55) % 285 701 708
Energy 368 284 30 % 285 29 % 1,075 983 1,343
Other and
eliminations 181 170 7 % 75 >100 % 426 380 380
-------------------------------------------------------------------------------
Underlying
EBIT 2,446 2,930 (17) % 1,477 66 % 7,660 4,596 6,425
-------------------------------------------------------------------------------
Earnings
before
financial
items, tax,
depreciation
and
amortization
(EBITDA) 3,766 4,335 (13) % 2,792 35 % 11,863 8,922 12,485
Underlying
EBITDA 3,889 4,319 (10) % 2,753 41 % 11,845 8,331 11,474
-------------------------------------------------------------------------------
Net income
(loss) 2,184 1,562 40 % 1,119 95 % 5,585 5,578 6,586
-------------------------------------------------------------------------------
Underlying
net income
(loss) 1,785 2,214 (19) % 958 86 % 5,580 2,906 3,875
-------------------------------------------------------------------------------
Earnings per
share 1.00 0.73 37 % 0.53 88 % 2.59 2.61 3.13
-------------------------------------------------------------------------------
Underlying
earnings per
share 0.82 1.04 (21) % 0.46 80 % 2.61 1.37 1.83
-------------------------------------------------------------------------------
Financial
data:
-------------------------------------------------------------------------------
Investments 1,424 1,420 0 % 1,914 (26) % 4,216 5,596 9,137
Adjusted net
cash (debt) (2,976) (5,146) 42 % (8,072) 63 % (2,976) (8,072) (5,598)
Change First First
Key Third Second Change Third prior 9 9
Operational quarter quarter prior quarter year months months Year
information 2017 2017 quarter 2016 quarter 2017 2016 2016
-------------------------------------------------------------------------------
Bauxite
production
(kmt) 3,043 2,943 3 % 2,777 10 % 8,386 8,069 11,132
Alumina
production
(kmt) 1,605 1,576 2 % 1,635 (2) % 4,704 4,706 6,341
Primary
aluminium
production
(kmt) 527 523 1 % 526 0 % 1,566 1,559 2,085
Realized
aluminium
price LME
(USD/mt) 1,921 1,902 1 % 1,612 19 % 1,859 1,552 1,574
Realized
aluminium
price LME
(NOK/mt) 15,496 16,265 (5) % 13,375 16 % 15,510 13,049 13,193
Realized
USD/NOK
exchange rate 8.07 8.55 (6) % 8.30 (3) % 8.35 8.41 8.38
Rolled
Products
sales volumes
to external
market (kmt) 236 239 (1) % 231 3 % 716 697 911
Sapa sales
volumes (kmt) 170 180 (6) % 170 0 % 527 527 682
Power
production
(GWh) 2,509 2,369 6 % 2,946 (15) % 7,746 8,781 11,332
-------------------------------------------------------------------------------
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.
Q3 2017 Report:
http://hugin.info/106/R/2144192/821711.pdf
Q3 2017 Presentation:
http://hugin.info/106/R/2144192/821719.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: 25.10.2017 - 07:00 Uhr
Sprache: Deutsch
News-ID 565106
Anzahl Zeichen: 13698
contact information:
Town:
Oslo
Kategorie:
Business News
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