Norsk Hydro fourth quarter 2012: Improved result on lower input costs
For best results when printing this announcement, please click on the link below: http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130212:nHUGcWg3 Hydro's underlying earnings before financial items and tax improved to NOK 138 million in the fourth quarter 2012 from an underlying loss of NOK 19 million in the previous quarter. Lower energy costs in Bauxite & Alumina, lower variable costs in Primary Metal and improved results for the Qatalum aluminum plant contributed to underlying results. *Underlying EBIT NOK 138 million *Lower raw material costs *Lower realized aluminium prices, higher alumina prices *Higher power prices and production in Energy *2013 aluminium demand growth outlook 2-4 % in world outside China *Proposed 2012 dividend NOK 0.75 per share "On the back of continuing challenging markets, our focus remains on improving performance across our value chain. The ambitious USD 300 program is expected to be completed at the end of 2013, strengthening Hydro's industry position. Our improvement efforts will continue, including plans to optimize production and performance in our bauxite and alumina operations in Brazil," Hydro's President and CEO Svein Richard Brandtzæg said. Bauxite & Alumina's underlying EBIT improved compared to the third quarter, due to higher alumina prices and lower energy costs for Alunorte, together with higher results from commercial operations. Underlying EBIT for Primary Metal improved compared to the third quarter, mainly due to better results in Qatalum. Lower realized aluminium prices negatively affected underlying EBIT, partly offset by lower operating costs. Savings targeted for Hydro's cost improvement program were achieved for the year. Excluding inventory and currency effects, underlying results for Hydro's Metal Markets operations declined, mainly due to lower volumes and margins together with lower results from sourcing and trading operations. Underlying EBIT for Rolled Products declined compared with the third quarter, impacted by lower margins and seasonally higher maintenance costs. Underlying EBIT for Energy increased in the quarter due to seasonally higher production and prices. Other and eliminations includes a significant negative charge related to elimination of unrealized gains and losses on internal inventories. Operating cash flow was NOK 2.8 billion for the quarter. Net cash used for investment activities amounted to NOK 1.0 billion. Hydro's net cash position was around NOK 1.7 billion at the end of the fourth quarter. For the full year 2012, underlying EBIT declined substantially to NOK 1,158 million from NOK 5,982 million in 2011. Lower aluminium prices and alumina prices had a significant effect on underlying results for the year. Ongoing efforts to reduce costs and improve operations partly offset the negative market effects. On October 15 Hydro announced an agreement with Orkla ASA to combine their respective extrusion profile, building systems and tubing businesses in a new joint venture company to be named Sapa. Completion of the transaction is expected to take place in the first half of 2013, following approval by the relevant competition authorities. Following the agreement, operating results for Hydro's Extruded Products are presented net of financial items and tax as Income (loss) from discontinued operations and excluded from reported EBIT and underlying EBIT. Hydro's Board of Directors proposes to pay a dividend of NOK 0.75 per share for 2012, reflecting the company's strong commitment to provide a cash return to its shareholders. The dividend reflects our operational performance for 2012 and a strong financial position, also taking into consideration the uncertain market outlook. Earnings before financial items and tax amounted to NOK 669 million in the fourth quarter, including net unrealized derivative gains and positive metal effects of NOK 555 million and other items amounting to negative NOK 23 million. In the previous quarter, Hydro incurred a reported loss before financial items and tax of NOK 267 million, including net unrealized derivative losses and negative metal effects of NOK 137 million and other items amounting to negative NOK 112 million. Other items included impairments of non current assets of NOK 140 million and a gain of NOK 68 million relating to pensions. Income from continuing operations amounted to NOK 364 million in the fourth quarter including net foreign exchange loss of NOK 102 million. In the previous quarter, Hydro incurred a net loss from continuing operations of NOK 64 million, including net foreign exchange gains of NOK 282 million. Loss from discontinued operations amounted to NOK 251 million in the quarter, including rationalization and closure costs of NOK 174 million. In the third quarter, loss from discontinued operations amounted to NOK 167 million, including rationalization and closure costs of NOK 43 million and a loss on disposal of Portalex amounting to NOK 144 million. Key financial information Fourth Third % change prior quarter Fourth % change prior year quarter Year Year NOK million, except per share data quarter quarter quarter 2012 2011 2012 2012 2011 Revenue 15585 14722 6 % 17157 (9) % 64181 71500 Earnings before financial items and tax (EBIT) 669 (267) >100 % 46 >100 % 432 10068 Items excluded from underlying EBIT (532) 249 >(100) % 1176 >(100) % 725 (4086) Underlying EBIT 138 (19) >100 % 1223 (89) % 1158 5982 Underlying EBIT : Bauxite & Alumina (73) (386) 81 % 159 >(100) % (791) 887 Primary Metal 53 (10) >100 % 484 (89) % 314 2486 Metal Markets 69 7 >100 % (39) >100 % 208 441 Rolled Products 71 214 (67) % 86 (17) % 640 673 Energy 322 220 47 % 441 (27) % 1459 1883 Other and eliminations (305) (64) >(100) % 92 >(100) % (672) (389) Underlying EBIT 138 (19) >100 % 1223 (89) % 1158 5982 Underlying EBITDA 1216 1114 9 % 2493 (51) % 5687 10497 Underlying income (loss) from continuing operations 58 (37) >100 % 1035 (94) % 509 3947 Underlying income (loss) from discontinued operations (59) 17 >(100) % (159) 63 % (5) (1) Underlying net income (loss) 0 (20) 100 % 876 (100) % 504 3947 Underlying earnings per share 0,00 0,00 - 0,42 (100) % 0,26 1,89 Net income (loss) 113 (231) >100 % (749) >100 % (1246) 6749 Earnings per share 0,07 (0,14) >100 % (0,36) >100 % (0,61) 3,41 Financial data: Investments 1107 806 37 % 3907 (72) % 3382 47510 Adjusted net interest-bearing debt (8271) (13678) 40 % (19895) 58 % (8271) (19895) Key Operational information Alumina production (kmt) 1397 1441 (3) % 1490 (6) % 5792 5264 Primary aluminium production (kmt) 485 484 - 539 (10) % 1985 1982 Realized aluminium price LME (USD/mt) 1940 2022 (4) % 2439 (20) % 2080 2480 Realized aluminium price LME (NOK/mt) 11069 11856 (7) % 13834 (20) % 12047 13884 Realized NOK/USD exchange rate 5,71 5,86 (3) % 5,67 1 % 5,79 5,60 Metal products sales, total Hydro (kmt) 731 794 (8) % 804 (9) % 3254 3303 Rolled Products sales volumes to external market (kmt) 226 228 (1) % 215 5 % 909 929 Power production (GWh) 2448 2157 13 % 2706 (10) % 10307 9582 Investor contact Contact Rikard Lindqvist Cellular +47 41751199 E-mail Rikard.Lindqvist@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 of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. Q4 report http://hugin.info/106/R/1677211/546900.pdf Q4 presentation http://hugin.info/106/R/1677211/546907.pdf ---------------------------------------------------------------------------------------------------- This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Norsk Hydro via Thomson Reuters ONE HUG#1677211
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