Fourth quarter 2013: Alunorte improvements, seasonality and lower power production
Feb 12, 2014
OTC Disclosure News Service
Oslo, Norway
–
Hydro’s underlying earnings before financial
items and tax (EBIT) fell to NOK 483 million in the fourth quarter 2013 from
NOK 659 million in the third quarter, mainly due to seasonal effects and lower
hydropower production. For the full year, underlying EBIT rose to 2,737 million
from 1,297 million in 2012, helped by cost savings, strong performance at the
Qatalum aluminium plant combined with higher product premiums, and despite
lower aluminium prices.
?
Underlying EBIT NOK 483
million
?
USD 300-program
completed, yielding NOK 1.5 billion improvements
?
Alunorte production
rising, offset by ICMS tax charges
?
Primary Metal lifted by
Qatalum insurance proceeds
?
Downstream seasonality,
lower power production
?
Proposed 2013 dividend
NOK 0.75 per share
?
Expect 2-4% aluminium
demand growth outside China in 2014
?
“Extensive improvement programs backed our
results for 2013, despite market uncertainty and low aluminium prices. 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,” says Hydro President and CEO Svein Richard Brandtz?g.
Fourth-quarter underlying EBIT for the Bauxite
Alumina business area was lifted by improved production at the Alunorte
alumina refinery in Brazil, following several disruptions in 2013, offset by
claims relating to ICMS taxes.
“I am pleased to report that production at
Alunorte is back at production levels seen in 2012, providing stable supplies
of top-quality alumina. Stable and sound operations at Alunorte remain a key
priority in 2014,” says Brandtz?g. “However, stable and predictable
framework conditions are absolutely critical to Hydro wherever we operate and a
prerequisite for making long-term commitments. We are in dialog with Brazilian
authorities, and doing our utmost to ensure that this is also the case in
Brazil.”
The USD 300 cost improvement program, targeting
Hydro’s fully owned aluminium plants, was concluded at the end of the year,
yielding around NOK 1.5 billion in annual improvements at the end of 2013
compared to 2009 cost levels.
“After four years of hard work, it is a
milestone for Hydro to have delivered the industry’s most ambitious improvement
program. We are pursuing opportunities with unabated strength in all parts of
our operations to further improve our robustness,” says Brandtz?g.
Underlying EBIT for the Primary Metal business
area improved in the fourth quarter compared to the third, mainly due to
insurance proceeds relating to a fire in a cooling tower at the Qatalum plant
in Qatar in 2012. Qatalum showed stable production above nameplate capacity
throughout the year, ensuring a first-decile aluminium smelter cost position.
Metal Markets delivered higher underlying EBIT
during the quarter due to higher margins and improved results from sourcing and
trading activities.
Rolled Products’ underlying EBIT declined in the
fourth quarter, mainly due to seasonal volume declines and higher maintenance
activity.
Underlying EBIT for Energy declined in the
fourth quarter compared to the third quarter, mainly due to lower power
production compared with unusually high production in the previous quarter.
Underlying EBIT for Sapa, the 50-50 extruded
products joint venture, declined in the quarter, reflecting a seasonally weaker
quarter and charges related to impairment of inventories and accounts
receivables.
Operating cash flow was NOK 2.5 billion for the
fourth quarter. Net cash used for investment activities amounted to NOK 0.9
billion. Hydro’s net cash position increased by NOK 1.2 billion, and amounted
to around NOK 0.7 billion at the end of the fourth quarter.
Reported earnings before financial items and tax
amounted to negative NOK 3 million in the fourth quarter. Reported EBIT
included net unrealized derivative losses and negative metal effects amounting
to NOK 151 million in total.
Reported earnings also included a loss of NOK 69
million from divestment of a rolling mill in Malaysia, charges of NOK 392
million relating to Hydro’s head office lease arrangement, penalties of NOK 109
million relating to the settlement of tax claims in Brazil and charges of NOK
172 million primarily related to rationalization activities in Sapa. In
addition, reported earnings included pension curtailment gains of NOK 390
million relating to the transition to defined contribution plans in Norway.
Hydro’s
Board of Directors proposes to pay a dividend of NOK 0.75 per share for 2013
reflecting the company’s strong commitment to provide a cash return to its
shareholders. The dividend reflects our operational performance for 2013 and a
strong financial position, also taking into consideration the uncertain market
outlook.
Key financial information
NOK million, except per share data
Fourth
quarter
2013
Third
quarter
2013
%change prior quarter
Fourth
quarter
2012
%change prior year quarter
Year
2013
Year
2012
Revenue
16 571
16 146
3 %
15 585
6 %
64 880
64 181
Earnings before financial items and tax (EBIT)
(3)
597
(100) %
704
(100) %
1 674
571
Items excluded from underlying EBIT
485
62
100 %
(532)
100 %
1 063
725
Underlying EBIT
483
659
(27) %
172
100 %
2 737
1 297
Underlying EBIT :
Bauxite Alumina
(379)
(370)
(2) %
(73)
(100) %
(1 057)
(791)
Primary Metal
484
337
44 %
58
100 %
1 422
335
Metal Markets
190
111
70 %
70
100 %
594
210
Rolled Products
111
182
(39) %
70
59 %
627
637
Energy
383
485
(21) %
322
19 %
1 653
1 459
Other and eliminations
(306)
(87)
(100) %
(275)
(11) %
(502)
(553)
Underlying EBIT
483
659
(27) %
172
100 %
2 737
1 297
Underlying EBITDA
1 578
1 753
(10) %
1 250
26 %
7 119
5 827
Underlying income (loss) from discontinued operations
-
57
(100) %
(54)
100 %
220
(5)
Net income (loss)
(758)
321
(100) %
87
(100) %
(839)
(1 331)
Underlying net income (loss)
140
393
(64) %
(24)
100 %
1 610
408
Earnings per share
(0.39)
0.11
(100) %
0.06
(100) %
(0.45)
(0.65)
Underlying earnings per share
0.02
0.14
(83) %
(0.01)
100 %
0.65
0.21
Financial data:
Investments
971
948
2 %
1 107
(12) %
3 586
3 382
Adjusted net interest-bearing debt
(9 503)
(10 732)
11 %
(8 304)
(14) %
(9 503)
(8 304)
Key Operational information
Alumina production (kmt)
1 452
1 316
10 %
1 397
4 %
5 377
5 792
Primary aluminium production (kmt)
492
491
-
485
2 %
1 944
1 985
Realized aluminium price LME (USD/mt)
1 802
1 822
(1) %
1 940
(7) %
1 902
2 080
Realized aluminium price LME (NOK/mt)
10 916
10 938
-
11 069
(1) %
11 160
12 047
Realized NOK/USD exchange rate
6.06
6.00
1 %
5.71
6 %
5.87
5.79
Metal products sales, total Hydro (kmt)
777
792
(2) %
731
6 %
3 164
3 254
Rolled Products sales volumes to external market (kmt)
226
234
(3) %
226
-
941
909
Power production (GWh)
2 411
2 838
(15) %
2 448
(1) %
10 243
10 307
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.
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Article source: http://www.otcmarkets.com/stock/NHYDY/news?id=75600
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