• Adjusted Operating Profit of NOK 544 million
• Higher realized alumina prices and total aluminum prices
• Production of Alunorte at record levels
• Seasonally lower electricity prices and production
• Aluminum demand in the world, excluding China, continues to exceed production
• Agreement signed to take over the primary aluminum plant in Soeral

“The demand for aluminum continues to exceed production, causing the market to be under pressure and the levels of total aluminum prices (price plus premium) to be higher since 2012. We continue our improvement efforts throughout the chain productive, and currently Qatalum is among the top ten aluminum factories in the world when it comes to cost positioning, ”said Hydro’s CEO, Svein Richard Brandtzæg.

The Bauxite & amp; Alumina, with all its assets in Brazil, showed a negative result, although it has improved compared to the first quarter of 2014, given the influence of higher prices and higher sales volume of alumina. This positive development was offset by the behavior of exchange rates and higher expenses with payment of ICMS on oil in the quarter.

“I am pleased to see that production at the Alunorte alumina refinery is at a record level of more than six million tonnes per year, but, unfortunately, the results are still poor. However, our “From B to A” improvement program has been developing well and results are expected to start impacting profit in the coming quarters, ”said Brandtzæg.

Influenced by higher premium products, adjusted operating profit in the Primary Metal area improved in the second quarter, but was negatively impacted by lower sales volumes and slightly lower aluminum prices.

The Metals Markets area had a weaker adjusted operating profit than in the first quarter, especially as a result of the drop in the results of purchases and trade, which were partially offset by the higher volumes of the remelting factories.

“It was a quarter full of important activities: we signed an acquisition contract for the primary metal factory in Soeral, whose products fit very well with Hydro's premium smelting product strategy; we signed four electricity supply contracts, ensuring part of our need to purchase external energy by 2020; we obtained financial support from the Enova institution to build the world's most energy-efficient pilot plant - which represents an important step towards becoming carbon neutral by 2020 and one of the pillars of our strategy to develop an aluminum portfolio based on the electricity of Norway, ”said the president.

The adjusted operating profit in the Rolled Products area remained stable compared to the previous quarter.

Due to the seasonally lower production of electricity and lower prices in our production areas, the adjusted operating profit in the Energy area declined compared to the first quarter.

Sapa's operating results improved during the quarter, influenced in part by seasonally stronger sales volumes.

Operating cash flow totaled one billion Norwegian crowns (NOK) in the second quarter, including approximately 0.5 billion from Qatalum dividends. The net cash used for investments totaled NOK 0.7 billion. Dividends paid during the quarter reached NOK 1.6 billion. Hydro's net debt position was around NOK 1.9 billion at the end of the second quarter.

EBIT amounted to NOK 620 million in the second quarter. In addition to the factors already mentioned above, EBIT includes net gains on unrealized derivatives and positive metal effects of NOK 154 million in all. Reported profits also included NOK 87 million, generated from rationalization activities at Sapa (Hydro's share).

In the previous quarter, EBIT reached NOK 822 million, including net gains on unrealized derivatives NOK 170 million in all. Reported profits include impairment of NOK 33 million linked to divestment in a foundry in Hannover and costs of NOK 86 million related especially to rationalization at Sapa (Hydro's share).

Revenue from continuing operations was NOK 269 million in the second quarter of 2014, including exchange losses of NOK 101 million. In the previous quarter, income from continuing operations represented NOK 462 million, including net foreign exchange gains of NOK 193 million.

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