• Adjusted EBIT of NOK 2,667 million
• Record result in the finishing area after stronger seasonal sales
• Lower prices for aluminum oxide and lower "all-in" aluminum prices
• New framework conditions for ICMS taxes negotiated
• Long-term power supply for the Rheinwerk guaranteed
• Continued challenges in terms of global market balance
• ~ 5% increase in global primary aluminum demand in 2015

"This quarter's results have been impacted by lower prices, but I am pleased with growing demand and the fact that aluminum is the preferred material in more and more applications, which has contributed to the record results for our processing activities," says CEO Svein Richard Brandtzæg.

Adjusted EBIT for Bauxite & amp; Alumina declined in the second quarter, reflecting the lower LME prices linked to the LME, a decline in indexed prices for aluminum oxide and lower sales volumes at indexed prices.

“We are pleased that we were able to agree on long-term ICMS framework conditions for Hydro's business in the state of Pará. This is fundamental to our goal of developing robust and sustainable activities in Pará and creating the conditions for sustainable growth in this region, ”says Brandtzæg.

In the Primary Metal business area, adjusted EBIT decreased in the second quarter, mainly due to the lower aluminum prices and premiums achieved.

Adjusted EBIT for Metal Markeds decreased in the second quarter, influenced by higher negative exchange rate and inventory valuation effects. Trading activity again recorded an adjusted loss, reflecting the continued decline in billet premiums. The result of the remelting plants increased mainly thanks to higher margins.

“Better results in the Rolled Products business area and at Sapa partially offset the effects of the difficult market for aluminum producers. The rapidly changing market conditions show how important our improvement programs are. The bottom line is that the importance of our joint efforts pays off, ”says Brandtzæg.

The Rolled Products business unit achieved an improved adjusted result, which is mainly due to seasonally higher deliveries and somewhat improved operating margins.

However, the result was negatively influenced by a decrease in the contribution from the Rheinwerk and a negative exchange rate development.

Adjusted EBIT for the Energy business segment declined compared to the first quarter, primarily due to the seasonal lower electricity generation, which was also influenced by the late spring thaw in the Norwegian mountains.

Adjusted EBIT for Sapa increased compared to the previous quarter, which was due to higher sales volumes and a strong development of the North American market, and the improvement programs in the entire organization are already further than planned. The second quarter result was negatively impacted by a sharp decline in metal premiums in North America.

Cash flow from operations in the second quarter was NOK 4.2 billion. Cash flow for investing activities was NOK 1.2 billion. A dividend of CZK 2.0 billion was paid out in the quarter. Hydro's net debt was approximately NOK 0.7 billion at the end of the second quarter.

Reported earnings before financial items and taxes for the second quarter were NOK 2,698 million. In addition to the factors mentioned above, the reported EBIT included unrealized gains from derivatives and positive metal effects totaling NOK 132 million and compensation of NOK 37 million related to insurance benefits. The reported result also included costs of NOK 139 million after tax (Hydro's share) for Sapa, including NOK 106 million for restructuring.

In the previous quarter, adjusted earnings before interest and taxes were NOK 3,206 million, including unrealized gains from derivatives and positive metal effects totaling NOK 72 million. The reported result also included costs of NOK 74 million (Hydro's stake) for Sapa, mostly related to unrealized losses from derivatives.

Earnings after taxes were 2 in the second quarter.064 million NOK, including a net currency gain of NOK 346 million, due to unrealized currency gains from debt in US dollars, primarily in Brazil. In the previous quarter, after-tax earnings were NOK 1,072 million, including a net currency loss of NOK 1,587 million, mainly due to the stronger US dollar.

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