Norsk Hydro Second Quarter 2004 OSLO, Norway, July 19 /PRNewswire-FirstCall/ -- Oslo (2004-07-19): Consolidated Results (US GAAP) (unaudited) Second quarter First half 2004 2003 2004 2003 Million, except per share data NOK NOK NOK NOK Operating revenues 38,250 31,354 77,848 67,117 Operating income 8,290 3,989 17,566 9,971 Non-consolidated investees 121 246 252 433 Financial income (expense), net (447) 152 (1,071) (499) Other income (loss), net -- (1,881) 110 (1,881) Income from continuing operations before tax and minority interest 7,964 2,506 16,857 8,024 Income tax expense (5,605) (735) (11,391) (4,711) Minority interest (135) 38 (107) 66 Income from continuing operations 2,224 1,809 5,359 3,379 Income from discontinued operations -- 515 1,083 1,146 Income before cumulative effect of change in accounting principle 2,224 2,324 6,442 4,525 Cumulative effect of change in accounting principle -- -- -- 281 Net income 2,224 2,324 6,442 4,806 Earnings per share from continuing operations (in NOK and Euro) 8.70 7.00 21.00 13.10 Earnings per share before change in accounting principle (in NOK and Euro) 8.70 9.00 25.20 17.50 Financial data EBITDA(2) - million 12,266 8,197 25,812 18,132 Investments - million 3,925 4,023 8,701 8,692 Net interest-bearing debt/equity (3) 0.20 0.48 0.20 0.48 2) EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization. 3) 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 2003 unless otherwise stated. Certain amounts in previously issued consolidated financial statements were reclassified to conform with the 2004 presentation. Hydro's income from continuing operations in the second quarter of 2004 was NOK 2,224 million (NOK 8.70 per share), compared with NOK 1,809 million (NOK 7.00 per share) in the second quarter of 2003. For the first half of 2004, Hydro's income from continuing operations was NOK 5,359 million compared with NOK 3,379 million in the first half of 2003. Hydro's agri business was transferred to Yara International ASA in a demerger transaction completed on 24 March 2004. Results relating to periods prior to the demerger are reported under Income from discontinued operations. The following discussion excludes these activities. "The second quarter marks another period with strong results for Hydro, both in terms of financial as well as operational performance. The results were influenced by high oil prices and improved aluminium markets and it is encouraging that both our main businesses delivered solid operational performance. Oil & Energy reported a significant increase in oil and gas production from the same period last year while Aluminium demonstrates continued progress," said President and CEO Eivind Reiten. "Hydro's financial results in the first six months of 2004 represent the best half-year results in our history. Our financial position remains robust and the organization is geared toward reaching ambitious targets and continuing to deliver value to our shareholders," Eivind Reiten said. Operating income for the second quarter of 2004 amounted to NOK 8,290 million compared with NOK 3,989 million in the second quarter of 2003. Both Oil & Energy and Aluminium delivered strong results for the quarter. Operating income for the first half of 2004 was NOK 17,566 million compared to NOK 9,971 million in the first half of 2003. The improved earnings in Oil & Energy were mainly due to increased production, continued high oil prices and good cost control. The average realized oil price was USD 34.7 per barrel in the second quarter of 2004, compared to USD 25.5 in second quarter 2003. Measured in NOK, the oil price was 33 percent above the corresponding period last year. Oil and gas production in the second quarter averaged 569,000 barrels of oil equivalents (boe) per day, compared to 484,000 boe per day in the second quarter of 2003. For the first half of 2004, production averaged 592,000 boe per day, an increase of 14 percent compared to the first half of 2003. The increase was mainly due to new fields coming on stream during the second half of 2003. Aluminium operations benefited from positive market conditions. Higher aluminium prices, higher volumes and the effects of improvement programs contributed to improved results. Hydro's realized price for aluminium increased from USD 1,417 per tonne in the second quarter of 2003, to USD 1,657 per tonne in the second quarter of 2004. Measured in NOK, the realized aluminium price improved by approximately 13 percent. Downstream activities benefited from increased demand, leading to higher volumes both from new capacity and improved capacity utilization. Margins were under pressure mainly due to increased metal costs. However, converted into NOK, margins improved slightly. Cash flow from operations in the first half of 2004 was NOK 12.2 billion compared to NOK 11.3 billion in the first half of 2003. Investments in the second quarter of 2004 amounted to NOK 3.9 billion. Around half of the amount invested related to oil and gas operations. The provision for current and deferred taxes in the first half of 2004 was NOK 11,391 million, approximately 68 percent of pre-tax income. Second quarter 2004 Non-cons. Operating inv., Other Depreciation NOK million income Interest & income and EBITDA (loss) selected amortization fin.items Hydro Oil & Energy 7,184 46 -- 2,534 9,764 Hydro Aluminium 1,269 102 -- 964 2,335 Other activities 47 49 -- 128 224 Corporate and eliminations (210) 146 -- 7 (57) Total 8,290 343 -- 3,633 12,266 First half 2004 Non-cons. Operating inv., Other Depreciation NOK million income Interest & income and EBITDA (loss) selected amortization fin.items Hydro Oil & Energy 15,002 108 -- 5,157 20,267 Hydro Aluminium 2,898 209 -- 1,936 5,043 Other activities 140 195 110 259 704 Corporate and eliminations (474) 264 -- 8 (202) Total 17,566 776 110 7,360 25,812 Outlook for the coming months Oil prices are expected to remain at a high level for the coming months due to continued strong global demand, capacity constraints and low stocks. Hydro's production of oil and gas during the second half of 2004 is expected to decline as a result of maintenance shutdowns and seasonal fluctuations in gas volumes. Oil and gas production on the Norwegian Continental Shelf (NSC) may also be impacted if the current labor dispute relating to floating rigs continues for an extended period. For Aluminium, the first half of 2004 was characterized by high volumes and increasing aluminium prices. The growth in aluminium shipments is expected to gradually level off as consumer inventories are filled. The downstream activity has experienced margin pressure in local currencies during the first half of the year, which is expected to continue in the second half. More information regarding Norsk Hydro ASA and the second quarter result is available on the Internet: http://www.hydro.com/ Attachments: 2nd Quarter Report: http://hugin.info/106/R/953195/135681.pdf 2nd Quarter Presentation: http://hugin.info/106/R/953194/135680.pdf 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, 2002 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 Cecilie Ditlev-Simonsen (+47) 22 53 20 97 (+47) 41 552 50 Idar Eikrem (+47) 22 53 32 73 (+47) 95 02 83 63 Kjetil Bakken (+47) 22 53 23 13 (+47) 91 889 889 Norsk Hydro ASA Drammensveien 264 N-0240 Oslo Norway Telephone: (+47) 22 53 81 00 Fax: (+47) 22 53 27 25 http://www.hydro.com/ DATASOURCE: Norsk Hydro CONTACT: Cecilie Ditlev-Simonsen, +47-22-53-20-97, or +47-41-552-50, or , or Idar Eikrem, +47-22-53-32-73, or +47-95- 02-83-63, or , or Kjetil Bakken, +47-22-53-23-13, or +47- 91-889-889, or . all of Norsk Hydro Web site: http://www.hydro.com/ http://hugin.info/106/R/953195/135681.pdf http://hugin.info/106/R/953194/135680.pdf

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