Skip to content

Fourth quarter of 2012: Better results with lower costs

Hydro's earnings before interest and taxes improved to NOK 138 million in the fourth quarter of 2012, coming from an operating loss of NOK 19 million in the last quarter. The fall in energy costs at Bauxita & amp; Alumina, the reduction of variable costs at Metal Primário and better results at Qatalum contributed to the results for the period.

  • NOK 138 million LAJIR
  • Fall in raw material costs
  • Lower realized aluminum prices, higher alumina prices
  • High energy and production prices in Energy
  • Prospects for an increase of 2 to 4% in aluminum demand in 2013 in the world outside China
  • Proposal of NOK 0.75 per share in dividends for 2012

"Still facing the challenges of the market, our focus remains on improving our performance throughout the production chain. The ambitious 300 Dollars program is expected to be completed in late 2013, strengthening Hydro's industrial position. Our efforts improvements will continue, including plans to optimize the production and performance of our bauxite and alumina operations in Brazil, ”says Hydro President Svein Richard Brandtzæg.

Compared to the third quarter, the underlying LAJIR of Bauxita & amp; Alumina increased, due to higher alumina prices and lower energy prices for Alunorte, in addition to better results in the commercial area.

Metal Primary's underlying EBITDA was better compared to the third quarter, especially due to the more positive results at Qatalum. The lower realized aluminum prices affected the underlying LAJIR, which were partially offset by the reduction in operating costs. The planned savings target for the year under Hydro's cost improvement program has been achieved.

Excluding the effects of inventory and foreign exchange, the underlying results of Mercados de Metal's operations fell, mainly due to lower margins and volumes, in addition to weaker commercial results.

Compared to the third quarter, there was a decline in the underlying EBITDA of Produtos Laminados, given the impact of lower margins and higher seasonal maintenance costs.

The underlying LAJIR of Energia had a lift in the quarter due to the seasonal rise in prices and production.

Others and Eliminations include significant negative effects related to unrealized gains and losses of internal inventories.

Operating cash flow was NOK 2.8 billion in the quarter. The net cash flow for investments totaled NOK 1.0 billion. Hydro's liquidity position was around NOK 1.7 billion at the end of the fourth quarter.

For the year 2012 as a whole, the underlying LAJIR was substantially reduced, to stand at NOK 1.158 million, compared to NOK 5.982 million in 2011. The reduction in aluminum and alumina prices had a significant effect on the annual result. However, continued efforts to reduce costs and improve operations partially offset the negative effects of the market.

On October 15th, Hydro announced the closing of an agreement with Orkla ASA, to merge its respective extrusion, construction systems and precision tubes businesses into a new joint venture named Sapa. The conclusion of the transaction is expected to occur in the first half of 2013, after its approval by the competent authorities. As a result of the agreement, the operating results of Produtos Extrudados are presented after interest and taxes as income (losses) from discontinued operations and excluded from the reported LAJIR and the underlying.

Hydro's Board of Directors proposes the payment of dividends of NOK 0.75 per share, reflecting the company's commitment to provide net income to shareholders. The dividend also reflects the 2012 operational performance and the strong financial position, taking into account the market uncertainty.

Profit before interest and taxes totaled NOK 669 million in the fourth quarter, including unrealized derivative net gains and positive metal effects of NOK 555 million, in addition to Other Items that amounted to NOK 23 million negative.

In the previous quarter, Hydro reported a loss before interest and taxes of NOK 267 million, including unrealized derivative net losses and negative metal effects of NOK 137 million, in addition to Other Items with a negative effect of NOK 112 million. Other Items includes a reduction in the recoverable amount of NOK 140 million non-current assets and a gain of NOK 68 million related to pensions.

Income from ongoing operations was NOK 364 million in the fourth quarter, including net exchange losses of NOK 102 million. In the previous quarter, Hydro's net loss on such operations was NOK 64 million, including net foreign exchange gains of NOK 282 million.

The amount of losses from discontinued operations was NOK 251 million in the quarter, including closing and rationalization costs of NOK 174 million. In the third quarter, losses from discontinued operations represented NOK 167 million, including closing and rationalization costs of NOK 43 million and a loss of NOK 144 million related to the sale of Portalex. & nbsp;

More in English:

Key financial information
NOK million, except per share data Fourth
quarter
2012
Third
quarter
2012
% change prior quarter Fourth
quarter
2011
% change prior year quarter Year
2012
Year 2011
& nbsp;
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Revenue 15,585 14,722 6% 17,157 (9)% 64,181 71,500
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Earnings before financial items and tax (EBIT) 669 (267) & gt; 100% 46 & gt; 100% 432 10,068
Items excluded from underlying EBIT (532) 249 & gt; (100)% 1,176 & gt; (100)% 725 (4,086)
Underlying EBIT 138 (19) & gt; 100% 1,223 (89)% 1,158 5,982
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Underlying EBIT: & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Bauxite & amp; Alumina (73) (386) 81% 159 & gt; (100)% (791) 887
Primary Metal 53 (10) & gt; 100% 484 (89)% 314 2,486
Metal Markets 69 7 & gt; 100% (39) & gt; 100% 208 441
Rolled Products 71 214 (67)% 86 (17)% 640 673
Energy 322 220 47% 441 (27)% 1,459 1,883
Other and eliminations (305) (64) & gt; (100)% 92 & gt; (100)% (672) (389)
Underlying EBIT 138 (19) & gt; 100% 1,223 (89)% 1,158 5,982
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Underlying EBITDA 1,216 1,114 9% 2,493 (51)% 5,687 10,497
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Underlying income (loss) from continuing operations 58 (37) & gt; 100% 1,035 (94)% 509 3,947
Underlying income (loss) from discontinued operations (59) 17 & gt; (100)% (159) 63% (5) (1)
Underlying net incomme (loss) 0 (20) 100% 876 (100)% 504 3,947
Underlying earnings per share 0.00 0.00 - 0.42 (100)% 0.26 1.89
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Net income (loss) 113 & nbsp; (231) & nbsp; & gt; 100% & nbsp; (749) & nbsp; & gt; 100% & nbsp; (1,246) & nbsp; 6,749 & nbsp;
Earnings per share 0.07 (0.14) & gt; 100% (0.36) & gt; 100% (0.61) 3.41
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;   & nbsp;
Financial data: & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;   & nbsp;
Investments 1,107 806 37% 3,907 (72)% 3,382 47,510
Adjusted net interest-bearing debt (8,271) (13,678) 40% (19,895) 58% (8,271) (19,895)
Key operational information
Alumina production (kmt) 1,397 1,441 (3)% 1,490 (6)% 5,792 5,264
Primary aluminum production (kmt) 485 484 - 539 (10)% 1,985 1,982
Realized aluminum price LME (USD / mt) 1,940 2,022 (4)% 2,439 (20)% 2,080 2,480
Realized aluminum price LME (NOK / mt) 11,069 11,856 (7)% 13,834 (20)% 12,047 13,884
Realized NOK / USD exchange rate 5.71 5.86 (3)% 5.67 1% 5.79 5.60
Metal products sales, total Hydro & nbsp; (kmt) 731 794 (8)% 804 (9)% 3,254 3.303
Rolled Products sales volumes to external market (kmt) 226 228 (1)% 215 5% 909 929
Power production (GWh) 2,448 2,157 13% 2,706 (10)% 10.307 9,582
This text is machine translated. To view the original Portuguese text, click on PT on the top right of this window

Recommended for you