Capital Markets Day 2009: Hydro steps up upstream repositioning
efforts
(Thomson Reuters ONE) - Hydro is intensifying efforts to improve its competitive position bylaunching new cost-reduction measures, following a year of demandingmarkets and decisive corrective actions. Hydro's improvement effortshave resulted in positive downstream earnings, while upstreamactivities remain challenged by the weak aluminium market and astrong Norwegian krone."Hydro has reacted swiftly to the ongoing crisis by implementing astring of firm and efficient actions, which have improved ourposition considerably. But the weak demand for aluminium andaluminium products, combined with the strong Norwegian currency, callfor even tougher measures to cut costs throughout the company andimprove the upstream cost position," says Hydro CEO Svein RichardBrandtzæg.The Norwegian-based aluminium and energy company remains optimisticabout the long-term prospects for aluminium, as the light-weight andendlessly recyclable metal is seen as a crucial part of the solutionto the world's climate challenges. In product application, aluminiummakes cars lighter and buildings more energy-efficient, paving theway for business opportunities across Hydro's value chain."Our long-term view on aluminium is encouraging. Aluminium will playan increasingly important role in an energy-constrained world.Hydro's technological edge and leading metallurgical competenceprovide a solid platform to take advantage of promising upstream anddownstream growth opportunities," Brandtzæg says.Hydro's Capital Markets Day includes the following highlights: * Hydro is launching a new cost-improvement program to reduce cash operating costs by USD 100 per tonne primary aluminium in 2012 compared to the 2009 level. 90 percent of the improvement is expected to be realized by end-2011. The improvement excludes Qatalum and impact of raw material prices. * Qatalum remains on target for start-up at the turn of the year 09/10 and will reach full production during fourth quarter 2010. The earnings contribution from Qatalum is expected to be somewhat negative in 2010 at the current aluminium price and affected by build-up costs and full depreciation. * Hydro has entered into an agreement to divest its Spanish 30,000 tonnes rolling mill Inasa in a cash-neutral transaction. * Total capital expenditures in 2010 are expected to be NOK 5.3 billion, down from NOK 10.2 billion in 2009. This includes project-financed investments in Qatalum of NOK 4.2 billion in 2009. Sustaining capital expenditures are being further reduced from about NOK 3.0 billion in 2009 to about NOK 2.5-3.0 billion in 2010. * Hydro prioritizes highly the maintenance of an investment grade credit rating. At the end of third quarter, Hydro had a net cash position of NOK 2.4 billion mainly supported by significant operating capital reductions during the first nine months. * The current market imbalance for primary aluminium in the world outside China is expected to continue into 2010, but at a lower level. Hydro is well prepared to capture business opportunities should markets change significantly. * Long-term prospects for aluminium remain encouraging, supported by high aluminium consumption in urbanization and infrastructure development, aluminium as part of the solution to the climate challenge and aluminium recyclability qualities. Aluminium semis consumption is expected to average 6.5 percent the next 10 years, led by the transportation and construction sectors.Hydro's Capital Markets Day presentation material is available onwww.hydro.com.Investor contactContact Stefan SolbergTelephone +47 22539280Cellular +47 91727528E-mail Stefan.Solberg(at)hydro.comPress contactContact Halvor MollandTelephone +47 22532421Cellular +47 92979797E-mail Halvor.Molland(at)hydro.com *********Certain statements included within this announcement containforward-looking information, including, without limitation, thoserelating to (a) forecasts, projections and estimates, (b) statementsof management's plans, objectives and strategies for Hydro, such asplanned expansions, investments or other projects, (c) targetedproduction volumes and costs, capacities or rates, start-up costs,cost reductions and profit objectives, (d) various expectations aboutfuture developments in Hydro's markets, particularly prices, supplyand demand and competition, (e) results of operations, (f) margins,(g) growth rates, (h) risk management, as well as (i) statementspreceded by "expected", "scheduled", "targeted", "planned","proposed", "intended" or similar statements.Although we believe that the expectations reflected in suchforward-looking statements are reasonable, these forward-lookingstatements are based on a number of assumptions and forecasts that,by their nature, involve risk and uncertainty. Various factors couldcause our actual results to differ materially from those projected ina forward-looking statement or affect the extent to which aparticular projection is realized. Factors that could cause thesedifferences include, but are not limited to: our continued ability toreposition and restructure our upstream and downstream aluminiumbusiness; changes in availability and cost of energy and rawmaterials; global supply and demand for aluminium and aluminiumproducts; world economic growth, including rates of inflation andindustrial production; changes in the relative value of currenciesand the value of commodity contracts; trends in Hydro's key marketsand competition; and legislative, regulatory and political factors.No assurance can be given that such expectations will prove to havebeen correct. Hydro disclaims any obligation to update or revise anyforward-looking statements, whether as a result of new information,future events or otherwise.http://hugin.info/106/R/1358632/330871.pdfhttp://hugin.info/106/R/1358632/330872.pdfhttp://hugin.info/106/R/1358632/330873.pdfhttp://hugin.info/106/R/1358632/330874.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 02.12.2009 - 12:00 Uhr
Sprache: Deutsch
News-ID 9148
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