Hydro's underlying earnings before financial items and tax was
NOK 559 million in the first quarter, down from NOK 3 147 million
in the same quarter last year. This mainly reflected lower realized
aluminium prices, higher raw material costs and the effects of the
production curtailment at the Alunorte alumina refinery.
- Underlying EBIT of NOK 559 million
- Production embargos at Alunorte lifted by Federal Court –
Alunorte, Paragominas and Albras resuming production
- Financial impact of cyber attack NOK
300-350 million in Q1 – main impact in Extruded
Solutions
- Strong performance in Extruded Solutions, in particular in
North American operations
- Primary Metal results down on price and raw material cost
- Strong Energy results on high prices
- 2019 global primary market expected in
deficit, continued macro uncertainty
"I am pleased that the production embargoes at Alunorte have
been lifted, so that we can focus our efforts on safely returning
Alunorte, Paragominas and Albras towards normal operations. Our
Brazilian operations are a fundament for Hydro’s overall agenda and
our ambition to lift profitability,” says President and CEO Hilde
Merete Aasheim.
“We remain optimistic about the long-term prospects for
aluminium. However, due to current market uncertainty and
industry-wide profitability challenge, we will lift our improvement
ambitions, perform a strategic review of Rolled Products and ensure
stricter financial discipline and higher earnings,” says Aasheim,
adding that Hydro will host an Investor Day on September 24 to
present updated ambitions for the company.
Underlying EBIT for Bauxite & Alumina decreased
significantly compared to the first quarter of last year, from NOK
741 million in Q1 2018 to NOK 153 million in Q1
2019. The results were driven by the effects of reduced
production at both Alunorte and Paragominas, as a consequence of
the production embargo, and higher raw material prices partly
offset by positive currency effects.
Underlying EBIT for Primary Metal declined from positive NOK 823
million in Q1 2018 to negative NOK 771 million in Q1 2019 mainly
due to lower all-in metal prices and higher raw material costs.
Underlying EBIT for Metal Markets improved from NOK 178 million
in Q1 2018 to NOK 190 million in Q1 2019 due to increased results
from the remelters and higher results in the sourcing and trading
activities, partly offset by negative contribution from currency
and inventory valuation effects
Underlying EBIT for Rolled Products decreased from NOK 232
million in Q1 2018 to NOK 138 million in Q1 2019. Results from the
rolling mills were stable, positive currency effects were offset by
personnel cost increases. Results from the Neuss smelter decreased
due to lower all-in metal prices and increased alumina cost.
Underlying EBIT for Extruded Solutions decreased from NOK 734
million in Q1 2018 to NOK 593 million in Q1 2019 as a direct effect
of the cyber-attack. The impact of the cyber-attack was partly
offset by higher margins, particularly from our North American
operations
Underlying EBIT for Energy increased from NOK 278 million in Q1
2018 to NOK 517 million in Q1 2019. The increase was mainly due to
higher prices and improved commercial results.
Hydro's "Better" improvement program will not reach its original
2019 target. This is mainly due to the production embargo at
Alunorte and subsequent production curtailments at Alunorte’s
bauxite source Paragominas and Hydro’s part owned subsidiary Albras
aluminium plant
Hydro's net debt position increased
from NOK 8.7 billion to NOK 12.1 billion
at the end of the quarter, which included a debt increase of NOK
3.1 billion as a result of implementation of IFRS 16 – Leases. Net
cash provided by operating activities amounted to NOK 0.8 billion.
Net cash used in investment activities, excluding short term
investments, amounted to NOK 1.6 billion.
Hydro's reported EBIT amounted to NOK 20 million for the first
quarter 2019, compared to NOK 3 301 million in the first
quarter 2018.
In addition to the factors discussed above, reported earnings
before financial items and tax (EBIT) and net income include
effects that are disclosed in the attached quarterly report. Items
excluded from underlying EBIT and underlying net income (loss) are
defined and described as part of the alternative performance
measures (APM) section in the quarterly report.
Investor contacts Stian Hasle +47 97736022
Stian.Hasle@hydro.com
Olena Lepikhina +47 96853035 Olena.Lepikhina@hydro.com
Press contact Halvor Molland +47 92979797
Halvor.Molland@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 the Norwegian Securities Trading Act
- Q1 2019 Presentation
- Q1 2019 Report
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