Norsk Hydro third quarter 2012: Results hit by lower prices
October 23 2012 - 1:02AM
GlobeNewswire
Hydro's underlying earnings
before financial items and tax fell to NOK 8 million in the third
quarter from NOK 549 million in the previous quarter. Low realized
alumina and aluminium prices weighed heavily on underlying results
for Hydro's upstream operations for the quarter while cost
improvement programs proceeded with full force to meet the
challenging market situation.
-
Underlying EBIT NOK 8 million
-
Sharp decline in alumina and aluminium
prices
-
Record-high bauxite production
-
Reduced downstream sales volume, partly offset by
lower operating cost
-
Lower power prices and production in
Energy
"Realized alumina and aluminium prices for the
quarter clearly reflect market and macro-economic uncertainty,
hitting our weak quarterly results. Hydro's response is to focus
our attention on operational performance, portfolio management and
capital discipline," Hydro's President and CEO Svein Richard
Brandtzæg said.
"The planned transaction with Orkla to form the
world's leading aluminium solution provider is strengthening Hydro
as a world-leading, resource-rich aluminium company as well as our
extusion business. Most of our extrusion markets continue to be
demanding and the new company will be better positioned to meet
these challenges and to capture the longer-term growth perspectives
for aluminium products,"said Brandtzæg.
Underlying EBIT for Bauxite & Alumina declined
further from a weak result in the previous quarter mainly due to
lower realized alumina prices and lower sales volumes.
Underlying EBIT for Primary Metal fell compared to
the second quarter also impacted by lower realized prices. Lower
operating costs partly offset the negative market effects.
Underlying results for Qatalum declined compared to the second
quarter which included the final insurance settlement relating to
the power outage in 2010.
Excluding inventory and currency effects,
underlying results for Hydro's midstream operations were stable
during the quarter.
Lower operating costs for Hydro's downstream
businesses had a positive impact on underlying EBIT for the
quarter. However, underlying results for Extruded Products
declined, affected by seasonally lower volumes and a further
weakening in market demand. Results for the quarter continued to be
impacted by difficult economic conditions in Europe.
Energy delivered lower underlying EBIT in the
third quarter compared to the previous quarter due to lower
production and lower prices.
Operating cash flow was NOK 1.1 billion for the
quarter. Net cash used for investment activities amounted to NOK 1
billion. Hydro's net debt position was around zero at the end of
the third quarter.
Hydro incurred a reported loss before financial
items and tax of NOK 414 million in the third quarter including net
unrealized derivative losses and negative metal effects of NOK 108
million and other items amounting to NOK 314 million. Other items
included a loss on the disposal of Portalex of NOK 144 million and
impairments of other assets of NOK 163 million. Other also included
rationalization charges and closure costs of NOK 75 million
relating to Extruded Products and Kurri Kurri and a gain of NOK 68
million relating to pensions.
In the previous quarter, Hydro incurred a reported
loss before financial items and tax of NOK 720 million including
net unrealized derivative gains of NOK 300 million, rationalization
and closure costs of NOK 408 million, impairment charges amounting
to NOK 1,175 million and positive metal effects of NOK 9
million.
Hydro incurred a net loss of NOK 231 million in
the third quarter including net foreign exchange gains of NOK 283
million. In the previous quarter, Hydro incurred a net loss of NOK
1,712 million including net foreign exchange losses of NOK 883
million.
Key financial
information
NOK million, except per share data |
Third
quarter
2012 |
Second
quarter
2012 |
% change prior quarter |
Third
quarter
2011 |
% change prior year quarter |
First 9
months
2012 |
First 9
months
2011 |
Year
2011 |
|
|
|
|
|
|
|
|
|
Revenue |
19 004 |
21 604 |
(12) % |
23 829 |
(20) % |
62 355 |
69 695 |
91 444 |
|
|
|
|
|
|
|
|
|
Earnings before financial items and tax (EBIT) |
(414) |
(720) |
42 % |
2 222 |
>(100) % |
(469) |
10 189 |
9 827 |
Items excluded from underlying EBIT |
422 |
1 269 |
(67) % |
(576) |
>100 % |
1 583 |
(5 189) |
(3 694) |
Underlying EBIT |
8 |
549 |
(98) % |
1 646 |
(99) % |
1 115 |
5 000 |
6 133 |
|
|
|
|
|
|
|
|
|
Underlying EBIT : |
|
|
|
|
|
|
|
|
Bauxite & Alumina |
(386) |
(188) |
>(100) % |
302 |
>(100) % |
(718) |
729 |
887 |
Primary Metal |
(10) |
240 |
>(100) % |
653 |
>(100) % |
261 |
2 002 |
2 486 |
Metal Markets |
7 |
44 |
(83) % |
93 |
(92) % |
139 |
480 |
441 |
Rolled Products |
214 |
204 |
5 % |
124 |
72 % |
569 |
588 |
673 |
Extruded Products |
27 |
53 |
(49) % |
40 |
(33) % |
95 |
241 |
151 |
Energy |
220 |
362 |
(39) % |
506 |
(57) % |
1 137 |
1 442 |
1 883 |
Other and eliminations |
(64) |
(166) |
61 % |
(73) |
12 % |
(368) |
(482) |
(389) |
Underlying EBIT |
8 |
549 |
(98) % |
1 646 |
(99) % |
1 115 |
5 000 |
6 133 |
|
|
|
|
|
|
|
|
|
Underlying EBITDA |
1 265 |
1 777 |
(29) % |
2 985 |
(58) % |
4 913 |
8 628 |
11 152 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
(231) |
(1 712) |
86 % |
797 |
>(100) % |
(1 359) |
7 498 |
6 749 |
Underlying net income (loss) |
(20) |
268 |
>(100) % |
1 071 |
>(100) % |
505 |
3 071 |
3 947 |
|
|
|
|
|
|
|
|
|
Earnings per share |
(0.14) |
(0.78) |
83 % |
0.49 |
>(100) % |
(0.68) |
3.84 |
3.41 |
Underlying earnings per share |
0.00 |
0.12 |
(97) % |
0.50 |
(99) % |
0.25 |
1.47 |
1.89 |
|
|
|
|
|
|
|
|
|
Financial data: |
|
|
|
|
|
|
|
|
Investments |
965 |
777 |
24 % |
1 125 |
(14) % |
2 639 |
43 836 |
48 025 |
|
|
|
|
|
|
|
|
|
Key Operational
information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alumina production (kmt) |
1 441 |
1 491 |
(3) % |
1 553 |
(7) % |
4 396 |
3 773 |
5 264 |
Primary aluminium production (kmt) |
484 |
502 |
(3) % |
522 |
(7) % |
1 500 |
1 443 |
1 982 |
Realized aluminium price LME (USD/mt) |
2022 |
2 167 |
(7) % |
2 592 |
(22) % |
2119 |
2 494 |
2 480 |
Realized aluminium price LME (NOK/mt) |
11856 |
12 637 |
(6) % |
14 225 |
(17) % |
12321 |
13 906 |
13 884 |
Realized NOK/USD exchange rate |
5.86 |
5.83 |
1 % |
5.49 |
7 % |
5.81 |
5.58 |
5.60 |
Metal products sales, total Hydro (kmt) |
794 |
857 |
(7) % |
850 |
(7) % |
2522 |
2 499 |
3 303 |
Rolled Products sales volumes to external market
(kmt) |
228 |
228 |
- |
228 |
- |
683 |
714 |
929 |
Extruded Products sales volumes to external market
(kmt) |
125 |
137 |
(9) % |
137 |
(9) % |
395 |
415 |
536 |
Power production (GWh) |
2 157 |
2 513 |
(14) % |
2 737 |
(21) % |
7 860 |
6 875 |
9 582 |
Investor contact
Contact Rikard Lindqvist
Cellular +47 41751199
E-mail Rikard.Lindqvist@hydro.com
Press contact
Contact Halvor Molland
Cellular +47 92979797
E-mail Halvor.Molland@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.Error: Reference source not found
This information is subject
of the disclosure requirements pursuant to section 5-12 of the
Norwegian Securities Trading Act.
Q3 report
Q3 presentation
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#1651178
Norsk Hydro (NYSE:NHY)
Historical Stock Chart
From Jun 2024 to Jul 2024
Norsk Hydro (NYSE:NHY)
Historical Stock Chart
From Jul 2023 to Jul 2024