Record Result for Hydro in First Quarter 2005
April 26 2005 - 5:32AM
PR Newswire (US)
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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