UPDATE 1-Aluminium maker Norsk Hydro Q4 beats forecast, offers dividend

Wed Feb 12, 2014 1:38am EST

* Underlying operating profit NOK 483 mln vs fcast 310 mln

* Offers dividend of NOK 0.75 per share, as expected

* Says market remains uncertain but is more upbeat on 2014

OSLO, Feb 12 (Reuters) - Norsk Hydro, one of the world's largest producers of aluminium, reported core earnings well above forecasts on Wednesday due to cost cuts and offered a dividend for 2013 in line with expectations.

The price of aluminium - used in the aerospace, construction and automotive sectors - has nearly halved since 2008 due to a massive global surplus of the metal, forcing loss-making firms to slash capacity and make savings.

Norsk Hydro was no exception and had to make several rounds of cost savings throughout its divisions.

"Extensive improvement programmes backed our results for 2013, despite market uncertainty and low aluminium prices," Chief Executive Svein Richard Brandtzaeg said in a statement.

"Although the uncertainty remains, we are entering 2014 on a positive note, as we expect demand for aluminium to slightly exceed production this year, in the world outside China."

Hydro reiterated that it saw world demand outside China growing by 2-4 percent in 2014.

Underlying operating profit rose to 483 million crowns ($79.02 million) for the fourth quarter from 138 million a year ago, beating expectations for 310 million in a Reuters poll.

Norsk Hydro fared better than some of its peers. The United States' biggest producer, Alcoa, reported a big loss for the fourth quarter due to falling aluminium prices earlier this year.

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