• Adjusted EBIT of NOK 2,215 million
• Historically low implicit costs for alumina in view of record bauxite production and currency effects
• Lower prices for aluminum oxide and lower "all-in" aluminum prices
• Strong development in processing in a seasonally weak quarter
• Signed letter of intent with Vale to increase MRN stake to 45%
• Growth of around 4% in global demand for primary aluminum in 2015

Adjusted EBIT for Bauxite & amp; Alumina increased compared to the second quarter, mainly due to a weaker Brazilian real and higher production at Paragominas and Alunorte. This was partially offset by lower LME-linked and indexed prices for alumina.

“The bauxite production reached new heights this quarter, which reflects the continuous improvement work in Paragominas in recent years. We are continuously strengthening our bauxite business and have signed a letter of intent with the Brazilian mining company Vale regarding the possible takeover of their 40 percent stake in the Brazilian bauxite producer MRN, ”says CEO Svein Richard Brandtzæg. The record-high bauxite production combined with currency effects also led to historically low implicit costs for aluminum oxide in the quarter.

Adjusted EBIT in the Primary Metal division declined in the third quarter due to lower premiums and aluminum prices, which was partially offset by a stronger US dollar and slightly higher sales volume.

Adjusted EBIT for Metal Markets increased in the third quarter thanks to improved results from trading activities as well as positive currency and inventory valuation effects. This was partially offset by weaker remelting results due to lower seasonal volumes and lower margins in Europe.

Adjusted EBIT in the Rolled Products business area increased compared to the second quarter of 2015, benefiting from higher deliveries and seasonally lower operating costs. The positive effects were partially offset by the lower contribution from the Rheinwerk due to lower "all-in" metal prices.

“I am pleased to see Rolled Products have a stronger quarter than usual in the third quarter. This was supported by the increasing demand for general engineering products, ”says Brandtzæg.
Adjusted EBIT for the Energy business area increased compared to the second quarter, primarily due to high electricity generation in the third quarter was influenced by the late spring thaw in the Norwegian mountains. This was largely offset by lower spot prices and higher property taxes.

Adjusted EBIT for Sapa decreased compared to the previous quarter due to the seasonally lower sales in Europe. This was partially offset by strong developments in the North American market with stable metal premiums, while second quarter results were negatively impacted by sharply falling metal premiums in North America. Improvement programs that are ahead of target across the organization also contributed positively to earnings in the quarter.

Cash flow from operations in the third quarter was NOK 4.5 billion, including a reduction in working capital of NOK 2.1 billion. Cash flow for investing activities was NOK 1.2 billion. Hydro's net liquidity increased by NOK 2.6 billion in the third quarter to NOK 3.3 billion at the end of the quarter. It was influenced by the effects of currency translation of around NOK 0.6 billion, which was mainly due to the strengthening of the US dollar against the Norwegian krone.

Reported earnings before interest and taxes in the third quarter were NOK 1,630 million. In addition to the factors mentioned above, reported EBIT included unrealized losses from derivatives and negative metal effects totaling NOK 520 million. The reported result also included costs of NOK 65 million after tax (Hydro's share) for Sapa, including NOK 48 million for restructuring.

In the previous quarter, reported earnings before financial items and taxes were NOK 2,698 million, including unrealized gains from derivatives and positive metal effects totaling NOK 132 million and remuneration of NOK 37 million linked to insurance benefits was. The reported result also included costs of NOK 139 million after tax (Hydro's share) for Sapa, including NOK 106 million for restructuring.

The after-tax loss for the third quarter was NOK 1,345 million, including a net currency loss of NOK 3,205 million, mainly due to unrealized currency losses from US dollar debt, primarily in Brazil, and embedded derivatives in power contracts in euros . In the previous quarter, after-tax earnings were NOK 2,064 million, including a net currency gain of NOK 346 million, mainly due to unrealized currency gains from US dollar debt in Brazil.

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