- Hilde Merete Aasheim announced as Hydro’s new CEO, effective May 8
- Cyber attack estimated to have a financial impact of NOK 400-450 million in the first quarter
- Alunorte and Ministerio Publico with joint petition to lift production embargo
- Successful placement of a total EUR 800 million in senior unsecured bonds
- Agreement reached with Department of Justice in an investigation of events dating back prior to 2015, into an Extruded Solutions plant in the U.S.
- Extruded Solutions acquires two companies within buildings systems segment
- 2019 global primary market expected in deficit, continued macro uncertainty
"The cyber attack that hit us on March 19 has affected our entire global organization, with Extruded Solutions having suffered the most significant operational challenges and financial losses," says President and CEO Svein Richard Brandtzæg, adding that the overall financial impact of the cyber attack is estimated at NOK 400-450 million in the first quarter. Hydro has a robust cyber insurance in place with recognized insurers.
"Recent developments in Brazil show that we are progressing towards a resolution of the production embargo on Alunorte, although the timing continues to be uncertain," Brandtzæg says. On April 12, Hydro and Ministerio Publico delivered a joint petition to the federal court in Brazil, asking for the production embargo against Alunorte to be lifted. The petition is currently under evaluation by the court.
Hydro announced on April 12 that it has postponed its complete first quarter report to June 5 because of the cyber attack. Preliminary data shows that external sales volumes in Extruded Solutions fell to 333,000 tonnes in the first quarter from 362,000 tonnes in the same quarter last year. Extruded Solutions is focusing on its value over volume strategy, and had planned for the current quarter volumes somewhat below the same quarter last year before the cyber attack, which further reduced actual volumes.
Hydro’s other business areas – Bauxite & Alumina, Primary Metal, Rolled Products and Energy – have been able to produce close to normal despite the attack, although based on work-intensive workarounds and manual procedures.
During the first quarter, Extruded Solutions acquired both the German powder coating company MBG and the remaining 50 percent ownership share in Technal Middle East, continuing its strategy of selective growth in niche markets. As announced on April 23, Hydro reached an agreement with the U.S. Department of Justice regarding an investigation into test results from Extruded Solutions’ plant in Portland. The investigation was launched before Hydro assumed full ownership of Sapa and relates to events dating back prior to 2015.
Hydro maintains its expectation of the global primary aluminium market to be in deficit for the full-year 2019, with continued macro uncertainty.
Certain statements included in this announcement contain forward-looking information, including, without limitation, information relating to (a) forecasts, projections and estimates, (b) statements of Hydro management concerning plans, objectives and strategies, such as planned expansions, investments, divestments, curtailments 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, and (i) qualified statements such as "expected", "scheduled", "targeted", "planned", "proposed", "intended" or similar.
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 businesses; 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.
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