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First quarter of 2013: earnings improvement thanks to higher sales and higher prices

Hydro's adjusted earnings before financial items and taxes (EBIT) rose to NOK 1,077 million in the first quarter, compared to NOK 172 million in the fourth quarter of 2012. Higher prices for alumina, aluminum and electricity, increased sales and better margins contributed to the adjusted result.

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  • Adjusted EBIT of NOK 1,077 million
  • Higher seasonal sales
  • Higher prices for alumina and aluminum
  • Higher production and higher electricity prices in the Energy business area
  • Still challenging market conditions

"We continue to see positive effects of our ambitious improvement measures throughout the company, which strengthens our position in the industry. We will intensify our efforts, especially in the strategically important business area Bauxite & amp; Alumina, where operational performance has top priority, ”says Hydro Svein CEO Richard Brandtzæg.

“Overall, we are experiencing increasing macroeconomic uncertainty. We anticipate a market balance for primary aluminum in 2013, based on the expected growth in demand outside of China of two to four percent, the announced production cuts and the newly added production, "said Brandtzæg.

Adjusted earnings (EBIT) in the Bauxite & amp; Alumina was stable compared to the previous quarter. Positive effects from higher prices for alumina, linked to the LME price, were offset by higher electricity costs.

Thanks to higher aluminum prices, higher product surcharges and seasonally higher sales, the Primary Metal business unit reported better adjusted earnings (EBIT) than in the fourth quarter. Hydro's share of Qatalum's adjusted earnings also improved in the quarter.

Higher sales and higher margins for the remelting plants, along with better results from procurement and trading activities, had a positive impact on Metal Markets' adjusted earnings (EBIT) in the quarter.

Adjusted earnings (EBIT) for the Rolled Products business area increased compared to the fourth quarter, with seasonally higher deliveries and higher margins playing a role. Operating costs were stable.

Adjusted earnings (EBIT) for the Energy business area rose in the quarter, which was mainly due to higher production and higher prices.

The Other and Eliminations result includes positive effects linked to unrealized gains and losses from internal inventory, compared to significant negative effects in the previous quarter.

Cash flow from operations was NOK 0.5 billion in the first quarter. Cash flow for investing activities was NOK 0.5 billion. Hydro's net liquidity was approximately NOK 0.4 billion at the end of the first quarter, which was also impacted by cash flow from discontinued operations and lease liabilities.

Reported earnings before financial items and taxes were NOK 705 million in the first quarter. In addition to the factors mentioned above, reported EBIT included unrealized losses from derivatives and positive metal effects totaling NOK 294 million and rationalization and closure costs of NOK 78 million. In the previous quarter, adjusted EBIT was NOK 704 million, including unrealized gains from derivatives and positive metal effects of NOK 555 million and other items that had a negative effect of NOK 23 million.

Income from continuing operations was NOK 254 million in the first quarter, including a net currency loss of NOK 115 million. In the previous quarter, the result from continuing operations was NOK 334 million, including a net currency loss of NOK 102 million.

Income from discontinued operations was NOK 9 million in the first quarter, including NOK 40 million in rationalization and closings costs. In the fourth quarter, the loss from discontinued operations was NOK 247 million, which included NOK 174 million in rationalization and closure costs.

With effect from January 1, 2013, Hydro retrospectively introduced a new accounting standard for Employee Benefits (IAS19R), which in this report leads to changes for earlier periods.

More in English:

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Key financial information
NOK million, except per share data First
quarter
2013
Fourth
quarter
2012
% change prior quarter First
quarter
2012
% change prior year quarter Year
2012
& nbsp;
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Revenue 16,111 15,585 3% 17,044 (5)% 64,181
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Earnings before financial items and tax (EBIT) 705 704 - 710 (1)% 571
Items excluded from underlying EBIT 372 (532) & gt; 100% (132) & gt; 100% 725
Underlying EBIT 1,077 172 & gt; 100% 578 86% 1,297
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Underlying EBIT: & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Bauxite & amp; Alumina (63) (73) 13% (144) 56% (791)
Primary Metal 364 58 & gt; 100% 36 & gt; 100% 335
Metal Markets 146 70 & gt; 100% 88 66% 210
Rolled Products 153 70 & gt; 100% 150 2% 637
Energy 517 322 60% 556 (7)% 1,459
Other and eliminations (38) (275) 86% (108) 64% (553)
Underlying EBIT 1,077 172 & gt; 100% 578 86% 1,297
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Underlying EBITDA 2,165 1,250 73% 1,780 22% 5,827
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Underlying income (loss) from discontinued operations 49 & nbsp; (55) & gt; 100% (3) & gt; 100% (5)
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Net income (loss) 263 87 & gt; 100% 575 (54)% (1,331)
Underlying net income (loss) 648 (24) & gt; 100% 233 & gt; 100% 408
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Earnings per share 0.14 0.06 & gt; 100% 0.24 (43)% (0.65)
Underlying earnings per share 0.30 (0.01) & gt; 100% 0.12 & gt; 100% 0.21
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Financial data: & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Investments 1,056 1.107 (5)% 776 36% 3,382
Adjusted net interest-bearing debt (9,290) & nbsp; (8,304) (12)% (11,470) 19% (8,304)
& nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp; & nbsp;
Key operational information
Alumina production (kmt) 1,361 1,397 (3)% 1,464 (7)% 5,792
Primary aluminum production (kmt) 478 485 (1)% 514 (7)% 1,985
Realized aluminum price LME (USD / mt) 2,043 1,940 5% 2,155 (5)% 2,080
Realized aluminum price LME (NOK / mt) 11,533 11,069 4% 12.404 (7)% 12,047
Realized NOK / USD exchange rate 5.64 5.71 (1)% 5.75 (2)% 5.79
Metal products sales, total Hydro & nbsp; (kmt) 754 731 3% 872 (13)% 3,254
Rolled Products sales volumes to external market (kmt) 236 226 5% 227 4% 909
Power production (GWh) 2.904 2,448 19% 3,190 (9)% 10.307

 

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