To provide a better understanding of Hydroâ€™s performance, we are presenting our operating performance on an underlying basis and excluding certain items from EBIT and income from continuing operations, such as unrealized gains and losses on derivatives, impairment and rationalization charges, effects of disposals of businesses and operating assets, as well as other items that are of a special nature or are not expected to be incurred on an ongoing basis.
|Corporate and Eliminations
Hydro achieved solid results for the year, supported by firm global demand and high aluminium prices with underlying Income from continuing operations rising to NOK 7,847 million from NOK 7,811 million in 2006.
Our realized aluminium prices increased measured in US dollars but were relatively unchanged measured in Norwegian kroner due to the weak dollar. Production of primary metal declined 3 percent. European general Extrusion and Building Systems operations delivered record results for the year due to improved margins and higher volumes. Underlying EBIT for our Energy business amounted to NOK 1,184 million in 2007, down from NOK 1,464 million in 2006. Reported Return on average capital increased to 14.6 percent for 2007 from 10.7 percent for 2006.
In 2007, primary aluminium demand rose by 3.5 million tonnes, or 10 percent, from 2006, driven mainly by strong growth in China. After a decline in aluminium prices in late 2007, prices strengthened again in early 2008 following production curtailments in China, South Africa and South America.
Underlying EBIT for Aluminium Metal amounted to NOK 8,041 million for 2007 as whole, down 1 percent from 2006. Our realized prices increased measured in US dollars but were relatively unchanged measured in Norwegian kroner due to the weak dollar. Production of primary metal in the full-year declined 3 percent from 2006, due to the closures of the Søderberg line in Årdal in June 2007 and the Stade smelter in the end of 2006.
Underlying results for our bauxite and alumina operations were down compared with 2006 mainly due to high energy prices, local currency effects and higher bauxite prices. Underlying EBIT for our Commercial operations increased for the year. Our European remelters continued to deliver solid operating results in 2007, mainly due to higher sales volumes and higher premiums. However, losses from our North American remelt operations also increased compared to 2006, due to difficult market conditions.
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