• Adjusted EBIT of NOK 544 million
• Higher all-in prices for aluminum and prices for aluminum oxide
• Production of aluminum locations at a record level
• Seasonally lower electricity generation and prices
• Demand for aluminum outside of China remains higher than production
• Contract for the takeover of the Søral smelter signed

The demand for aluminum is still higher than production, which leads to a tense market and causes the all-in metal price to rise to the highest level since 2012. We continue our improvement efforts along the entire value chain. Qatalum is now one of the 10 best aluminum smelters worldwide in terms of cost, ”explains CEO Svein Richard Brandtzæg.

Adjusted EBIT for the Bauxite & amp; Alumina was still weak, but slightly higher compared to the first quarter of 2014 due to higher alumina prices realized and rising alumina sales. However, the positive development was largely offset by negative currency effects and higher energy costs due to the ICMS tax for the entire quarter.

"I am happy that production at the Alunorte alumina refinery in Brazil has reached the record level of more than six million tons a year, but unfortunately the results are still poor. The improvement program "From B to A" is proceeding according to plan and this should have an impact on the results in the coming quarters, "says Brandtzæg.

Adjusted Primary Metal earnings improved in the second quarter thanks to higher product premiums, which were partially offset by lower sales and slightly lower aluminum prices.

Metal Markets achieved lower adjusted earnings compared to the previous quarter, primarily due to weaker results for sourcing and trading, partly offset by higher remelting volumes.

"It was an eventful quarter. We have signed an agreement to acquire the Søral smelter and its products fit well with Hydro's strategy to manufacture quality products in the foundries. We signed four contracts for electricity supplies, thereby partially securing the necessary supply from external sources after 2020. Enova Hydro has also awarded grants to build a pilot plant with the world's most energy-efficient equipment. This is an important step towards Hydro's goal of becoming carbon neutral by 2020 and a milestone in our strategy to develop the portfolio of hydropower smelters in Norway, ”says Brandtzæg.

Adjusted EBIT for the Rolled Products business area corresponded to that of the first quarter.

Compared to the first quarter of 2014, adjusted earnings for the Energy business area decreased, mainly due to seasonal lower electricity generation and lower prices in our production areas.

Adjusted earnings for Sapa improved in the quarter, thanks in part to higher seasonal sales.

Cash flow from operating activities was NOK 1.0 billion in the second quarter, which includes approximately 0.5 billion dividends from Qatalum. Cash flow for investing activities was NOK 0.7 billion. The dividend paid in the quarter was NOK 1.6 billion. Hydro's net debt was approximately NOK 1.9 billion at the end of the second quarter.

Reported earnings before interest and taxes in the second quarter were NOK 620 million. In addition to the above factors, the reported EBIT includes unrealized gains from derivatives and positive metal effects of NOK 154 million. The reported result also includes costs of NOK 87 million (share of Hydro) at Sapa, which are mainly linked to restructuring.

Hydro recorded NOK 822 million in profit before financial items and taxes in the previous quarter, which included unrealized gains on derivatives totaling NOK 170 million. The reported result also included a write-down of NOK 33 million in connection with the sale of the Hydro foundry in Hanover and NOK 86 million (share of Hydro) at Sapa, which was primarily linked to rationalization measures.

Income from continuing operations was NOK 269 million in the second quarter, including a net currency loss of NOK 101 million. In the previous quarter, the result from continuing operations was NOK 462 million, including a net currency gain of NOK 193 million.

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