Hydro's underlying earnings before financial items and tax
(EBIT) fell to NOK 483 million in the fourth quarter 2013 from NOK
659 million in the third quarter, mainly due to seasonal effects
and lower hydropower production. For the full year, underlying EBIT
rose to 2,737 million from 1,297 million in 2012, helped by cost
savings, strong performance at the Qatalum aluminium plant combined
with higher product premiums, and despite lower aluminium
prices.
- Underlying EBIT NOK 483 million
- USD 300-program completed, yielding NOK 1.5 billion
improvements
- Alunorte production rising, offset by ICMS tax charges
- Primary Metal lifted by Qatalum insurance proceeds
- Downstream seasonality, lower power production
- Proposed 2013 dividend NOK 0.75 per share
- Expect 2-4% aluminium demand growth outside China in 2014
"Extensive improvement programs backed our results for 2013,
despite market uncertainty and low aluminium prices. Although the
uncertainty remains, we are entering 2014 on a positive note, as we
expect demand for aluminium to slightly exceed production this
year, in the world outside China," says Hydro President and CEO
Svein Richard Brandtzæg.
Fourth-quarter underlying EBIT for the Bauxite & Alumina
business area was lifted by improved production at the Alunorte
alumina refinery in Brazil, following several disruptions in 2013,
offset by claims relating to ICMS taxes.
"I am pleased to report that production at Alunorte is back at
production levels seen in 2012, providing stable supplies of
top-quality alumina. Stable and sound operations at Alunorte remain
a key priority in 2014," says Brandtzæg. "However, stable and
predictable framework conditions are absolutely critical to Hydro
wherever we operate and a prerequisite for making long-term
commitments. We are in dialog with Brazilian authorities, and doing
our utmost to ensure that this is also the case in Brazil."
The USD 300 cost improvement program, targeting Hydro's fully
owned aluminium plants, was concluded at the end of the year,
yielding around NOK 1.5 billion in annual improvements at the end
of 2013 compared to 2009 cost levels.
"After four years of hard work, it is a milestone for Hydro to
have delivered the industry's most ambitious improvement program.
We are pursuing opportunities with unabated strength in all parts
of our operations to further improve our robustness," says
Brandtzæg.
Underlying EBIT for the Primary Metal business area improved in
the fourth quarter compared to the third, mainly due to insurance
proceeds relating to a fire in a cooling tower at the Qatalum plant
in Qatar in 2012. Qatalum showed stable production above nameplate
capacity throughout the year, ensuring a first-decile aluminium
smelter cost position.
Metal Markets delivered higher underlying EBIT during the
quarter due to higher margins and improved results from sourcing
and trading activities.
Rolled Products' underlying EBIT declined in the fourth quarter,
mainly due to seasonal volume declines and higher maintenance
activity.
Underlying EBIT for Energy declined in the fourth quarter
compared to the third quarter, mainly due to lower power production
compared with unusually high production in the previous
quarter.
Underlying EBIT for Sapa, the 50-50 extruded products joint
venture, declined in the quarter, reflecting a seasonally weaker
quarter and charges related to impairment of inventories and
accounts receivables. Operating cash flow was NOK 2.5 billion for
the fourth quarter. Net cash used for investment activities
amounted to NOK 0.9 billion. Hydro's net cash position increased by
NOK 1.2 billion, and amounted to around NOK 0.7 billion at the end
of the fourth quarter.
Reported earnings before financial items and tax amounted to
negative NOK 3 million in the fourth quarter. Reported EBIT
included net unrealized derivative losses and negative metal
effects amounting to NOK 151 million in total.
Reported earnings also included a loss of NOK 69 million from
divestment of a rolling mill in Malaysia, charges of NOK 392
million relating to Hydro's head office lease arrangement,
penalties of NOK 109 million relating to the settlement of tax
claims in Brazil and charges of NOK 172 million primarily related
to rationalization activities in Sapa. In addition, reported
earnings included pension curtailment gains of NOK 390 million
relating to the transition to defined contribution plans in
Norway.
Hydro's Board of Directors proposes to pay a dividend of NOK
0.75 per share for 2013 reflecting the company's strong commitment
to provide a cash return to its shareholders. The dividend reflects
our operational performance for 2013 and a strong financial
position, also taking into consideration the uncertain market
outlook.
Key financial information NOK million,
except per share data |
Fourth quarter
2013 |
Third quarter 2013 |
%change prior quarter |
Fourth quarter 2012 |
%change prior year quarter |
Year 2013 |
Year 2012 |
|
|
|
|
|
|
|
|
Revenue |
16 571 |
16
146 |
3
% |
15
585 |
6
% |
64 880 |
64
181 |
|
|
|
|
|
|
|
|
Earnings
before financial items and tax (EBIT) |
(3) |
597 |
>(100) % |
704 |
>(100) % |
1 674 |
571 |
Items
excluded from underlying EBIT |
485 |
62 |
>100
% |
(532) |
>100
% |
1 063 |
725 |
Underlying EBIT |
483 |
659 |
(27) % |
172 |
>100 % |
2 737 |
1 297 |
|
|
|
|
|
|
|
|
Underlying EBIT : |
|
|
|
|
|
|
|
Bauxite
& Alumina |
(379) |
(370) |
(2)
% |
(73) |
>(100) % |
(1 057) |
(791) |
Primary
Metal |
484 |
337 |
44
% |
58 |
>100
% |
1 422 |
335 |
Metal
Markets |
190 |
111 |
70
% |
70 |
>100
% |
594 |
210 |
Rolled
Products |
111 |
182 |
(39)
% |
70 |
59
% |
627 |
637 |
Energy |
383 |
485 |
(21)
% |
322 |
19
% |
1 653 |
1
459 |
Other and eliminations |
(306) |
(87) |
>(100) % |
(275) |
(11)
% |
(502) |
(553) |
Underlying EBIT |
483 |
659 |
(27) % |
172 |
>100 % |
2 737 |
1 297 |
|
|
|
|
|
|
|
|
Underlying EBITDA |
1 578 |
1 753 |
(10) % |
1 250 |
26 % |
7 119 |
5 827 |
|
|
|
|
|
|
|
|
Underlying income (loss) from discontinued operations |
- |
57 |
(100) % |
(54) |
100 % |
220 |
(5) |
|
|
|
|
|
|
|
|
Net
income (loss) |
(758) |
321 |
>(100) % |
87 |
>(100) % |
(839) |
(1
331) |
Underlying net income (loss) |
140 |
393 |
(64) % |
(24) |
>100 % |
1 610 |
408 |
|
|
|
|
|
|
|
|
Earnings
per share |
(0.39) |
0.11 |
>(100) % |
0.06 |
>(100) % |
(0.45) |
(0.65) |
Underlying earnings per share |
0.02 |
0.14 |
(83) % |
(0.01) |
>100 % |
0.65 |
0.21 |
|
|
|
|
|
|
|
|
Financial data: |
|
|
|
|
|
|
|
Investments |
971 |
948 |
2
% |
1
107 |
(12)
% |
3 586 |
3 382 |
Adjusted net interest-bearing debt |
(9 503) |
(10 732) |
11 % |
(8 304) |
(14) % |
(9 503) |
(8 304) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Operational information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alumina
production (kmt) |
1 452 |
1
316 |
10
% |
1
397 |
4
% |
5 377 |
5 792 |
Primary
aluminium production (kmt) |
492 |
491 |
- |
485 |
2
% |
1 944 |
1
985 |
Realized
aluminium price LME (USD/mt) |
1 802 |
1
822 |
(1)
% |
1
940 |
(7)
% |
1 902 |
2
080 |
Realized
aluminium price LME (NOK/mt) |
10 916 |
10
938 |
- |
11
069 |
(1)
% |
11 160 |
12
047 |
Realized
NOK/USD exchange rate |
6.06 |
6.00 |
1
% |
5.71 |
6
% |
5.87 |
5.79 |
Metal
products sales, total Hydro (kmt) |
777 |
792 |
(2)
% |
731 |
6
% |
3 164 |
3
254 |
Rolled
Products sales volumes to external market (kmt) |
226 |
234 |
(3)
% |
226 |
- |
941 |
909 |
Power production (GWh) |
2 411 |
2 838 |
(15) % |
2 448 |
(1) % |
10 243 |
10 307 |
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.
This information is subject of the disclosure requirements
pursuant to section 5-12 of the Norwegian Securities Trading
Act.
Q4 Report http://hugin.info/106/R/1760966/596056.pdf Q4
Presentation http://hugin.info/106/R/1760966/596080.pdf
HUG#1760966
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