For the fourth quarter 2010 Hydro’s share of underlying earnings is expected to be a loss of about NOK 400 million. In total, the estimated underlying loss for the second half 2010 is about NOK 625 million compared to a loss of about NOK 285 million in the first half.
Following a shutdown due to an extended power outage on August 10, the Qatalum plant in Qatar restarted aluminium production on September 15. Qatalum is expected to reach full capacity by the end of the first quarter 2011.
Qatalum's insurance coverage related to the incident is considered robust. The insurance is expected to cover a majority of the loss related to fixed assets and business interruption, and Qatalum is in a constructive dialogue with its insurers to determine the exact coverage. Following the conclusion of these discussions the first payment on account from the insurers is expected to be requested during the fourth quarter 2010.
Qatalum is a 50-50 joint venture between Qatar Petroleum and Hydro. When complete, it will be one of the most modern, energy-efficient and environmentally high-performing aluminium plant in the world, with an annual production capacity of 585,000 tonnes of aluminium.
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.
Published: October 12, 2010