• Adjusted EBIT of NOK 2.28 billion
• Higher all-in aluminum and alumina prices realized
• Rising raw material costs
• Results of Laminated Products affected by operational difficulties
• Better program up to date for the NOK 500 million target in 2017
• Pilot technology project in Karmoy proceeds as planned and within budget for the start of production in the fourth quarter of 2017
• Qualification of the Automotive Line 3 product in progress and expected to start production in 2017
• Expected growth in global demand for primary aluminum for 2017 estimated at 4-6%, with a global market largely in balance

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"We have increased our expectation of growth in global primary aluminum demand for 2017 from 3-5% to 4-6% and expect a highly balanced global market. Hydro is well positioned in this market” , said Hydro President and CEO Svein Richard Brandtzæg.

"The demand for aluminum for light and sustainable solutions continues to grow and confirms our belief in Hydro's integrated chain, based on low carbon aluminum production”, he adds.

A good financial and operational performance does not happen alone, but accompanied by a good safety performance. In April at the Karmoy plant in Norway, we had the most tragic type of accident we could have: a fatality. So we must never lose sight of the most important task of all for us: ensuring that employees return home safely every day.

Adjusted EBIT for the Bauxite & amp; Alumina increased in the period, compared to the previous quarter. Alumina prices, which were higher due to a better alumina index and prices on the London Stock Exchange, were partially affected by lower sales volumes, an increase in fuel oil and caustic soda prices and negative exchange effects, due to the strengthening of the real against the US dollar. In addition, the planned maintenance programs at Hydro Paragominas and Hydro Alunorte reduced the production of bauxite and alumina in the period. The fourth quarter, however, had the positive influence of NOK 151 million referring to contractual clauses with Vale that were still open.

Adjusted EBIT for the Primary Metal business area increased in the first quarter, due to higher all-in metal prices, which were higher and higher volume. This increase was, however, partially affected by the significantly higher cost of alumina.

Adjusted EBIT for Mercados de Metal fell substantially in the first quarter, as a result of weaker sourcing results and commercial operations, in addition to negative valuation effects inventory and exchange effects.

In the Rolled Products business area, adjusted EBIT increased compared to the fourth quarter of 2016. Seasonally better sales volumes were, however, partially affected by operational difficulties, mainly related to the restart of production after the maintenance carried out at the end of last year and the implementation of new equipment.

"On May 4, we will open our new state-of-the-art production line in Germany, with an annual capacity of 150 thousand tons of aluminum for automotive products, increasing the total automotive capacity from Hydro to 200,000 tonnes per year. Aluminum parts for the automotive industry will make millions of new cars lighter, helping manufacturers meet their low emissions targets and reducing global emissions, ”said Brandtzæg.

Compared to the previous quarter, the adjusted EBIT for the Energy business area was higher. Higher production and lower area costs were, however, partly affected by falling prices and rising production costs; these costs increased mainly due to the seasonally higher equity taxes in the period, which were in turn partially offset by lower transmission costs.

Sapa's adjusted EBIT also increased in the first quarter, compared to the previous quarter, reflecting the general seasonality of the industry in this period.

Regarding the Better improvement program, Hydro has also made progress. Although we are currently slightly behind the initial plan, the company expects to reach the NOK 500 million targets for this year and NOK 2.9 billion by 2019.

Hydro's net cash flow position fell NOK 0.1 billion in the first quarter, to NOK 5.9 billion at the end of the period, while net cash from operating activities amounted to NOK 0.7 billion, impacted by the increase in operating capital due to the seasonality of the period and higher costs. The net cash used in investment activities, excluding short-term investments, was NOK 1.2 billion.

In the first quarter, earnings reported before interest and taxes amounted to NOK 2.41 billion. In addition to the factors mentioned above, reported EBIT includes unrealized net derivative losses of NOK 192 million and positive effects of NOK 286 million metal. Reported profits also include a net gain of NOK 32 million from Sapa (Hydro's after-tax quota) related to unrealized derivative gains and net foreign exchange gains.

In the previous quarter, reported earnings before interest and taxes totaled NOK 1.96 billion, including unrealized derivative gains of NOK 106 million and positive effects of NOK 68 million metal. Included in the reported profits is also a cost of NOK 285 million related to the depreciation of capitalized costs of a review of the construction of the CAP alumina refinery project, partially owned by Hydro, and a revenue of NOK 254 million related to the termination of contractual clauses. open with Vale, both belonging to the Bauxite & amp; Alumina. In addition, reported profits include a cost of NOK 32 million referring to a change in the interest rate used to calculate environmental liabilities related to disused facilities in Germany and a net profit of NOK 23 million from unrealized derivative gains. , rationalization costs and net foreign exchange gains for Sapa (Hydro's quota after tax).

Net income amounted to NOK 1.83 billion in the first quarter of 2017, including a net foreign exchange gain of NOK 218 million, which largely reflects the strengthening of the real against the dollar and influences dollar debt in Brazil, just as the weakening of the euro in future rates against the Norwegian krone resulted in an unrealized gain in derivatives embedded in euro energy contracts.

In the previous quarter, net profit totaled NOK 1.00 billion, including net foreign exchange losses of NOK 26 million, which in general reflect the strengthening of the euro against the Norwegian krone and affect euro commitments in Norway and derivatives embedded in energy contracts.

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