Norsk Hydro ASA's underlying earnings before financial items and
tax (EBIT) increased to NOK 2,886 million in the fourth quarter, up
from NOK 1,490 million in the third quarter of 2014. Bauxite &
Alumina and Primary Metal delivered their highest quarterly results
since 2007.
- Record high quarterly underlying EBIT of NOK 2,886 million
- Proposed 2014 dividend NOK 1 per share
- Revised dividend policy: 40 % of net income over the cycle
- Higher realized all-in metal and alumina prices, supported by
currency movements
- Improved operating performance at Alunorte and Paragominas
- Karmøy technology pilot investment decision made
Higher realized aluminium prices, product premiums and realized
alumina prices had significant positive impact on the quarter
together with the substantial strengthening of the US dollar
compared to the NOK and BRL.
Underlying EBIT for Bauxite and Alumina improved significantly
in the fourth quarter reflecting higher realized alumina prices,
higher sales volumes and lower operating costs at Alunorte together
with positive currency developments. Bauxite production increased
in the quarter reaching 10.2 million mt on an annualized basis.
"I am pleased to see the highest quarterly results we have
reported since we became a pure play aluminium company in 2007. For
the second quarter in a row, we also see a solid improvement in
operating costs at Alunorte and Paragominas, as well as increased
production levels, reflecting robust operations," says President
and CEO, Svein Richard Brandtzæg. "In line with our commitment to
return cash to our shareholders, the Board of Directors proposed to
raise the annual dividend from NOK 0.75 per share to NOK 1 per
share, and at the same time revised the dividend policy from 30% to
40% of net income over the cycle" Brandtzæg continues.
Underlying EBIT for Primary Metal improved substantially in the
fourth quarter influenced by a further increase in realized
aluminium prices and product premiums. The strengthening USD
compared to the NOK and BRL also had a significant positive impact
on underlying results for the quarter.
"I am very pleased that we have decided to go ahead with the
Karmøy technology pilot project, following the approval from ESA
last week. The technology pilot will demonstrate Hydro's next
generation technology aiming to produce aluminium at the world's
lowest energy consumption and CO2 footprint per tonne of
metal," says Brandtzæg.
"We will continue our improvement efforts in 2015, both on the
commercial and operational side. As earnings outlook has improved,
now is the time to really show the strength of our improvement
culture," says Brandtzæg.
Metal Markets delivered higher underlying EBIT compared to the
previous quarter influenced by positive currency effects and
improved results from remelt operations, partly offset by lower
results from sourcing and trading activities.
Underlying EBIT for Rolled Products declined compared with the
third quarter of 2014 mainly due to seasonally lower sales volumes.
Margin pressure continued, however, this was mostly offset by
currency gains on export sales. Positive contributions from the
Rheinwerk smelter due to higher all-in metal1) prices had a
positive effect on underlying results for the quarter.
Compared to the third quarter, underlying EBIT for Energy
increased due to higher production.
Underlying EBIT for Sapa declined compared to the third quarter,
mainly due to seasonally lower demand.
Operating cash flow amounted to NOK 4.4 billion for the fourth
quarter. Cash used for investment activities amounted to NOK 0.8
billion net of sales proceeds. Hydro's net debt position amounted
to NOK 0.1 billion at the end of the fourth quarter also influenced
by unrealized currency losses, payment of dividends to minority
interests and a payment to Vale representing the first of two
tranches for the remaining Paragominas shares.
For the full year, underlying EBIT more than doubled to NOK
5,692 million compared with NOK 2,725 million in 2013 influenced by
the significant increase in all-in metal prices1) together with the
strengthening US dollar compared to the NOK and BRL. Following
several years of challenging market conditions, the global
aluminium market has improved with substantially higher all-in
metal prices together with a better demand and supply balance for
primary aluminium with a market deficit of around one million mt in
the world outside China. Significant operational and commercial
improvements implemented throughout the value chain have
strengthened Hydro's ability to create value in an environment of
improving market fundamentals.
Hydro's Board of Directors proposes to pay a dividend of NOK 1
per share for 2014 reflecting the company's commitment to provide a
cash return to its shareholders. The dividend reflects our
operational performance for 2014, strong financial position and
improved earnings outlook for 2015. Hydro's Board of Directors has
revised the company's dividend policy from an average of 30 percent
to 40 percent of net income over the cycle to our shareholders.
Reported earnings before financial items and tax amounted to NOK
2,295 million in the fourth quarter. In addition to the factors
discussed above, reported EBIT included net unrealized derivative
losses and positive metal effects of negative NOK 72 million in
total. Reported earnings also included impairment charges of NOK
145 million related to the rolling mill in Slim, Italy. In
addition, reported EBIT included NOK 337 million (Hydro's share)
relating to Sapa mainly for impairment and restructuring charges,
and net other charges of NOK 36 million.
In the previous quarter reported earnings before financial items
and tax amounted to NOK 1,937 million including net unrealized
derivative gains and positive metal effects of NOK 476 million in
total. Reported earnings also included other charges of NOK 30
million.
Loss from continuing operations amounted to NOK 168 million in
the fourth quarter including a net foreign exchange loss of NOK
2,252 million. In the previous quarter, income from continuing
operations amounted to NOK 665 million including a net foreign
exchange loss of NOK 1,001 million.
1) The all-in metal price refers to the LME aluminium price plus
premiums.
Key
financial information NOK million, except per share
data |
Fourth quarter 2014 |
Third quarter 2014 |
% change prior quarter |
Fourth quarter 2013 |
% change prior year quarter |
Year 2014 |
Year 2013 |
|
|
|
|
|
|
|
|
Revenue |
21656 |
19698 |
10
% |
16570 |
31
% |
77907 |
64877 |
|
|
|
|
|
|
|
|
Earnings before
financial items and tax (EBIT) |
2295 |
1937 |
19
% |
(14) |
>100
% |
5674 |
1663 |
Items excluded from
underlying EBIT |
591 |
(447) |
>100
% |
485 |
22
% |
18 |
1063 |
Underlying EBIT |
2886 |
1490 |
94 % |
471 |
>100 % |
5692 |
2725 |
|
|
|
|
|
|
|
|
Underlying EBIT : |
|
|
|
|
|
|
|
Bauxite &
Alumina |
528 |
(26) |
>100
% |
(379) |
>100
% |
(55) |
(1057) |
Primary Metal |
1989 |
1216 |
64
% |
484 |
>100
% |
3937 |
1422 |
Metal Markets |
221 |
171 |
29
% |
190 |
17
% |
634 |
594 |
Rolled Products |
96 |
243 |
(60)
% |
100 |
(3)
% |
698 |
615 |
Energy |
360 |
234 |
54
% |
383 |
(6)
% |
1197 |
1653 |
Other and
eliminations |
(308) |
(349) |
12
% |
(306) |
(1)
% |
(717) |
(502) |
Underlying EBIT |
2886 |
1490 |
94 % |
471 |
>100 % |
5692 |
2725 |
|
|
|
|
|
|
|
|
Underlying EBITDA |
4170 |
2615 |
59 % |
1619 |
>100 % |
10299 |
7306 |
|
|
|
|
|
|
|
|
Underlying income (loss) from discontinued operations |
- |
- |
- |
- |
- |
- |
220 |
|
|
|
|
|
|
|
|
Net income (loss) |
(168) |
665 |
>(100) % |
(758) |
78
% |
1228 |
(839) |
Underlying net income (loss) |
1979 |
1043 |
90 % |
140 |
>100 % |
3728 |
1610 |
|
|
|
|
|
|
|
|
Earnings per share |
(0.18) |
0.29 |
>(100) % |
(0.39) |
53
% |
0.39 |
(0.45) |
Underlying earnings per share |
0.83 |
0.43 |
96 % |
0.02 |
>100 % |
1.55 |
0.65 |
|
|
|
|
|
|
|
|
Financial
data: |
|
|
|
|
|
|
|
Investments |
1449 |
889 |
63
% |
1057 |
37
% |
3625 |
3761 |
Adjusted
net interest-bearing debt |
(13587) |
(14061) |
3 % |
(10128) |
(34) % |
(13587) |
(10128) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Operational
information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alumina production
(kmt) |
1501 |
1478 |
2
% |
1452 |
3
% |
5933 |
5377 |
Primary aluminium
production (kmt) |
499 |
487 |
2
% |
492 |
1
% |
1958 |
1944 |
Realized aluminium
price LME (USD/mt) |
1997 |
1906 |
5
% |
1802 |
11
% |
1850 |
1902 |
Realized aluminium
price LME (NOK/mt) |
13355 |
11909 |
12
% |
10916 |
22
% |
11624 |
11160 |
Realized NOK/USD
exchange rate |
6.69 |
6.25 |
7
% |
6.06 |
10
% |
6.28 |
5.87 |
Metal products sales,
total Hydro (kmt) |
780 |
811 |
(4)
% |
777 |
- |
3305 |
3164 |
Rolled Products sales
volumes to external market (kmt) |
213 |
244 |
(13)
% |
226 |
(5)
% |
946 |
941 |
Power
production (GWh) |
2823 |
2170 |
30 % |
2411 |
17 % |
10206 |
10243 |
Investor contact Contact Pål Kildemo Cellular +47 97096711
E-mail Pal.Kildemo@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 to the disclosure requirements
pursuant to section 5-12 of the Norwegian Securities Trading
Act.
Q4 Report http://hugin.info/106/R/1893442/670933.pdf Q4
Presentation http://hugin.info/106/R/1893442/670934.pdf
HUG#1893442
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