Record Result for Hydro in First Quarter 2005 OSLO, Norway, April 26 /PRNewswire-FirstCall/ -- Consolidated results (US GAAP) (unaudited) First quarter Year 2005 2005 2004 2004 Million, except per share NOK EUR1) NOK NOK data Operating revenues 42,152 5,138 39,082 153,891 Operating income 11,754 1,433 9,276 31,847 Non-consolidated investees 213 26 131 628 Financial income (expense), net (910) (110) (624) 136 Other income (loss), net - - 110 169 Income from continuing operations before tax and minority interest 11,057 1,349 8,893 32,780 Income tax expense (7,283) (888) (5,786) (21,197) Minority interest (81) (10) 28 (106) Income from continuing operations 3,693 451 3,135 11,477 Income from discontinued operations - - 1,083 1,083 Net income 3,693 451 4,218 12,560 Basic and diluted earnings per share from continuing operations (in NOK and Euro) 2) 14.70 1.80 12.30 45.10 Basic and diluted earnings per share (in NOK and Euro) 2) 14.70 1.80 16.50 49.40 Financial data Investments - million 3,464 422 4,776 19,464 Adjusted net interest-bearing debt/equity 3) 0.07 0.07 0.18 0.11 1) Presentation in Euro is a convenience translation based on the exchange rate at 31 March 2005, which was 8.2032. 2) Basic earnings per share are computed using the weighted average number of ordinary shares outstanding. There were no diluting elements. 3) Adjusted net interest-bearing debt divided by shareholders' equity plus minority interest, adjusted for unfunded pension obligation (after tax) and present value of future obligations on operating leases. All comparative figures are for the corresponding period in 2004 unless otherwise stated. Certain amounts in previously issued consolidated financial statements were reclassified to conform with the 2005 presentation. Hydro's income from continuing operations for the first quarter was NOK 3,693 million (NOK 14.70 per share), compared to NOK 3,135 million (NOK 12.30 per share) for the first quarter of 2004. On 24 March 2004, Hydro's agri business was transferred to Yara International ASA in a demerger transaction. Results of the transferred operations relating to periods prior to the demerger are reported under "Income from discontinued operations". The following discussion excludes those activities. Operating income for the first quarter of 2005 amounted to NOK 11,754 million compared to NOK 9,276 million in the first quarter of the previous year. "Our operating results for the first quarter of 2005 represent a new record result for Hydro. High oil and gas prices and increased aluminium prices combined with good production performance underlie the very strong financial results. The quarter contributes to a continued improvement of our financial strength," said Hydro's president and CEO Eivind Reiten. "A major milestone in the quarter was achieved 20 March at the offshore Troll field, where accumulated oil production from the thin oil zones passed one billion barrels. Originally Troll was regarded as a gas field with non- commercial oil. As operator for Troll oil we are proud that Troll continues to be one of the largest crude oil producers in the North Sea in the coming years," says Eivind Reiten. Operating income for Oil & Energy reached a record level of NOK 9,842 million for the quarter. Hydro realized average oil prices of US dollar 46.4 per barrel in the first quarter of 2005, an increase of 11 percent compared to the fourth quarter of 2004 and 47 percent higher than the first quarter of the previous year. Oil and gas production averaged 584,000 barrels of oil equivalents (boe) per day during the first quarter, about the same level as the final quarter of the previous year. However, average production for the quarter declined by 5 percent from the record high level of 615,000 boe per day achieved in the first quarter of 2004. The decline resulted primarily from production losses related to the unscheduled shutdowns of the partner-operated Snorre and Vigdis fields as well as unscheduled shutdowns and planned maintenance stops of other fields. Operating income for Energy and Oil Marketing amounted to NOK 1,046 million for the quarter which was NOK 313 million higher than the first quarter of the previous year. The increase was strongly influenced by unrealized gains relating to the valuation of a gas purchase contract of roughly NOK 250 million. Aluminium's operating income amounted to NOK 1,341 million for the quarter, declining by NOK 288 million from the first quarter of 2004. Results relating to Hydro's upstream operations improved as a result of increased volumes and strong aluminium prices. Primary metal production increased by 7 percent compared to the first quarter of 2004 to 444,000 tonnes. The increase resulted primarily from the Sunndal expansion. Compared to the first quarter of 2004, Hydro's realized aluminium price in US dollars increased about 17 percent to US dollar 1,793 per tonne. Realized prices in Norwegian kroner improved by 8 percent. The developments in operating income also reflected unrealized losses on London Metal Exchange (LME) contracts of NOK 86 million for the quarter compared to unrealized gains of NOK 349 million in the first quarter of the previous year. Reduced volumes and margins in the company's downstream operations also had a negative impact for the quarter. The Aluimprover de-manning and cost reduction program was completed at the end of the first quarter, on schedule, and at a total cost substantially lower than originally estimated and with expected future annual savings on target. Ongoing negotiations relating to the potential aluminium plant in Qatar are proceeding as planned. First quarter 2005 Non-cons. Operating inv., Other Depreciation Adjusted NOK million income Interest & income and EBITDA (loss) selected amortization fin.items Hydro Oil & Energy 9,842 35 - 2,539 12,416 Hydro Aluminium 1,341 192 - 903 2,436 Other activities 175 121 - 126 422 Corporate and eliminations 396 177 - 5 578 Total 11,754 525 - 3,573 15,852 Outlook for the coming quarters Oil prices are expected to remain high. Continued high volatility in the gas and power markets can be expected to impact the valuation of contracts resulting in unrealized gains and losses in future quarters. Planned maintenance shutdowns are expected to impact production levels for oil and gas in the next two quarters. Exploration drilling activity is expected to remain high throughout 2005. Towards the middle of April, aluminium trading on the LME ranged between US dollar 1,850 - 1,950 per tonne. Upstream market fundamentals appear relatively sound. Economic growth is expected to continue in 2005 at a lower rate than the previous year. Chinese exports of primary aluminium could reach levels similar to 2004 as a result of high prices despite the imposition of export taxes effective 1 January 2005. Downstream European market developments are expected to remain weak. Indicators for the US market are positive but with lower expected growth rates. The Chinese downstream market is estimated to show continued strong growth. Other results and developments for the Group Income tax expense for the first quarter amounted to NOK 7,283 million compared to NOK 5,786 million for the corresponding period of the previous year. Income tax expense represented approximately 66 percent and 65 percent of pretax income in the respective quarters. Cash flow from operations for the first quarter amounted to NOK 8.5 billion, an equivalent amount compared to the corresponding period of 2004. Investments amounted to NOK 3.5 billion for the quarter. Roughly 80 percent of the amount invested related to oil and gas operations. Further information about Norsk Hydro ASA and the company's results are available on the Internet: http://www.hydro.com/ Certain statements in this press release are or may constitute "forward- looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not in the nature of historical facts may be deemed to be forward-looking statements and may contain identifying words such as "believes", "anticipates", "plans", "expects" and similar expressions. These forward looking statements are based on Hydro's current expectations, assumptions, estimates and projections about the company and the industries in which it engages in business. All forward-looking statements involve risks and uncertainties. For a detailed description of factors that could cause Hydro's actual results to differ materially from those expressed in or implied by such statements, please refer to its annual report on Form 20-F for the year-ended December 31, 2004 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission. With respect to each non- GAAP financial measure Hydro uses in connection with its financial reporting and other public communications, Hydro provides a presentation of what Hydro believes to be the most directly comparable GAAP financial measure and a reconciliation between the non-GAAP and GAAP measures. This information can be found in Hydro's earnings press releases, quarterly reports and other written communications, all of which have been posted to Hydro's website (http://www.hydro.com/). Contact Idar Eikrem Tor Steinum Telephone +47 22533273 +47 22532731 Cellular +47 95028363 +47 95083933 E-mail http://hugin.info/106/R/991024/149146.pdf DATASOURCE: Norsk Hydro CONTACT: Idar Eikrem, +47-22533273, or cellular, +47-95028363, , or Tor Steinum, +47-22532731, or cellular, +47-95083933, , Norsk Hydro Web site: http://hugin.info/106/R/991024/149146.pdf http://www.hydro.com/

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