- LAJIR subjacente de NOK 588 milhões
- Declínio de resultados a montante nos preços de alumínio realizados, compensados parcialmente pelo pagamento do seguro pela Qatalum
- Resultados mais fracos a jusante e midstream devido a custos mais altos e vendas sazonais mais baixas, margem continuam estáveis
- Resultados melhores no setor de energia devido a preços altos e alta produção
- Expectativa de aumento em 7% da demanda de alumínio primário nos principais mercados da Hydro em 2011
- Expectativa de a unidade de alumínio Qatalum atingir capacidade total de produção a partir de junho de 2011
- Conclusão do negócio com a Vale ocorrerá provavelmente no primeiro trimestre de 2011
- Proposta de dividendo de NOK 0,75 por ação para 2010
“O ano de 2010 foi um ano de grandes mudanças para a Hydro e estas transformações vão se fazer notar em 2011. Eu espero que a produção da Qatalum atinja capacidade total a partir de junho de 2011 e espero que a aquisição planejada do negócio de alumínio da Vale fique concluída no primeiro trimestre, consolidando essa jogada audaciosa” diz o presidente e diretor-geral, Sven Richard Brandtzæg.
“Atualmente, o preço do alumínio está a um nível confortável. Notamos que a demanda foi crescente em todo 2010 e que continua a crescer em 2011, além de que parte importante de nossos negócios a jusante já conta com sólidos pedidos para o primeiro semestre de 2011. No entanto, os resultados do quarto trimestre confirmam a necessidade de manter foco no melhoramento de custos, afirma Brandtzæg.
Os resultados subjacentes da Metais Primários diminuíram durante o quarto trimestre, principalmente devido aos preços de alumínio realizados mais baixo, embora parcialmente compensados pelo pagamento do seguro pela queda de energia em agosto de 2010 na Qatalum, sociedade conjunta entre a Qatar Petroleum e a Hydro. Os resultados subjacentes da Alumina e Matérias Primas mantiveram-se estáveis, graças à lucratividade das atividades comerciais de alumina.
Os resultados operacionais negativos da Qatalum aumentaram no quarto trimestre, como era de se esperar e o reinício da produção só ocorreu em setembro. Ao final do quarto trimestre, 321 das 704 células estavam operando com capacidade total. O início final de capacidade total de produção foi retardado pelo atraso na entrada em atividades das turbinas a vapor da usina. Espera-se que a Qatalum atinja capacidade total de produção a partir de junho de 2011.
As operações a jusante e midstream da Hydro resultaram em LAJIR subjacente mais baixo, comparado com o terceiro trimestre, especialmente por causa dos custos operacionais mais elevados, incluindo os custos para atividades planejadas de manutenção e o volume de vendas sazonais mais baixos. As margens se mantiveram estáveis. O LAJIR subjacente para a Energia cresceu substancialmente, comparado com o trimestre anterior, devido a preços spot mais elevados e níveis de produção significativamente mais altos.
Para o ano de 2010 como um todo, a Hydro alcançou LAJIR subjacente de NOK 3,351 milhões, comparado com as perdas subjacentes de NOK 2,555 milhões em 2009. Esta melhora marcante se deve à recuperação do mercado, que elevou os preços e aumentou a demanda, e a redução de custos e pessoal. O volume de vendas no mercado aumentou em 17 %, comparado com a queda de 18 % no ano anterior, o que parcialmente reflete aumento de estoques pelos clientes. O excesso de oferta no mercado decresceu, mas os estoques continuaram a níveis recordes.
Os resultados subjacentes melhoraram enormemente para os negócios a montante durante 2010, basicamente devido aos preços de alumínio realizados mais alto e melhor desempenho nas atividades já existentes na área de alumina e matérias primas. Manteve-se o foco na redução de custos operacionais no portfólio de fundição da Hydro. Ao final de 2010, se atingiu uma melhora de custos de USD 50 por tonelada dos USD 300 por tonelada que o programa de melhora de custos visa atingir por completo até o final de 2013.
O LAJIR subjacente para os negócios midstream foi fortemente influenciado pelos efeitos negativos do câmbio em 2009. Os resultados subjacentes das atividades a jusante foram bem mais elevados em consequência de o volume de vendas ter quase chegado aos mesmos níveis de antes da crise financeira. Foco contínuo nas medidas de redução de custos e margens operacionais estáveis deram bons resultados juntamente com o desenvolvimento positivo do mercado e o fato de as operações dos produtos laminados terem atingido resultados recordes para o ano. O LAJIR subjacente para os negócios de energia melhorou em 2010, dado o elevado preço spot e maior produção.
As atividades operacionais líquidas perfizeram NOK 3,6 bilhões no quarto trimestre e os investimentos somaram NOK 1,6 bilhão no período, incluindo cerca de NOK 0,6 bilhão investidos na Qatalum. Ao final do quarto trimestre, a liquidez da Hydro era de NOK 11 bilhões.
O Conselho Administrativo da Hydro sugere que o dividendo para 2010 seja de NOK 0,75 por ação, refletindo a meta da empresa de proporcionar a seus acionistas retorno em dinheiro. A decisão está baseada em maior lucratividade e boas perspectivas de mercado, assim como a sólida posição financeira da Hydro e sua capacidade de gerar dinheiro.
More in English:
|Key financial information|
|NOK million, except per share data||Fourth
|% change prior quarter||Fourth
|% change prior year quarter||Year
|Revenue||19,406||18,424||5 %||16,427||18 %||75,754||67,409|
|Earnings before financial items and tax (EBIT)||768||274||>100 %||(938)||>100 %||3,184||(1,407)|
|Items excluded from underlying EBIT 1)||(180)||690||287||167||(1,148)|
|Underlying EBIT||588||965||(39) %||(651)||>100 %||3,351||(2,555)|
|Primary Metal||191||399||(52) %||(717)||>100 %||1,198||(2,556)|
|Metal Markets||62||163||(62) %||(20)||>100 %||321||(83)|
|Rolled Products||105||227||(54) %||57||84 %||864||26|
|Extruded Products||24||102||(77) %||68||(65) %||444||(67)|
|Energy||482||169||>100 %||295||63 %||1,416||1,240|
|Other and eliminations||(277)||(95)||>(100) %||(334)||17 %||(893)||(1,114)|
|Underlying EBIT||588||965||(39) %||(651)||>100 %||3,351||(2,555)|
|Net income (loss)||658||(63)||>100 %||(587)||>100 %||2,118||416|
|Underlying net income (loss)||376||545||(31) %||(791)||>100 %||1,852||(3,066)|
|Earnings per share||0.39||(0.07)||>100 %||(0.45)||>100 %||1.33||0.24|
|Underlying earnings per share||0.21||0.33||(35) %||(0.61)||>100 %||1.14||(2.5)|
|Investments||1,613||1,591||1 %||2,371||(32) %||6,231||5,947|
|Adjusted net interest-bearing debt||(6,427)||(8,280)||22 %||(15,645)||59 %||(6,427)||(15, 645)|
|Key operational information|
|Primary aluminium production (kmt)||360||355||2 %||332||8 %||1,415||1,396|
|Realized aluminium price LME (USD/mt)||2,074||2,179||(5) %||1,804||15 %||2,113||1,698|
|Realized aluminium price LME (NOK/mt)||12,436||13,503||(8) %||10,452||19 %||12,674||10,764|
|Realized NOK/USD exchange rate||6.00||6.20||(3) %||5.80||3 %||6.00||6.34|
|Metal Markets sales volumes to external market (kmt)||417||429||(3) %||375||11 %||1,717||1,468|
|Rolled Products sales volumes to external market (kmt)||234||239||(2) %||211||11 %||945||794|
|Extruded Products sales volumes to external market (kmt)||127||134||(5) %||119||6 %||529||463|
|Power production (GWh)||2,263||1,479||53 %||1,929||17 %||8,144||7,897|
See "Fourth quarter report 2010" for footnotes.
About Hydro's reporting
To provide a better understanding of Hydro's underlying performance, the following discussion of operating performance excludes certain items from EBIT (earnings before financial items and tax) and net income. See "Items excluded from underlying EBIT and net income" for more information on these items.
Reported EBIT and net income
Reported EBIT for Hydro amounted to NOK 768 million in the fourth quarter including net positive effects of NOK 180 million. These effects were comprised of net unrealized derivative gains of NOK 132 million, positive metal effects of NOK 92 million, insurance proceeds of NOK 90 million relating to the Qatalum power outage and other net negative effects of NOK 134 million including rationalization and closure costs.
In the previous quarter, reported EBIT for Hydro amounted to NOK 274 million including net negative effects of NOK 690 million. These effects were comprised of net unrealized derivative losses of NOK 524 million, negative metal effects of NOK 52 million and impairment charges relating to Qatalum amounting to NOK 114 million.
Net income for the fourth quarter amounted to NOK 658 million including net foreign exchange gains of NOK 232 million. In the third quarter Hydro incurred a net loss amounting to NOK 63 million including net foreign exchange losses of NOK 246 million.
Market developments and outlook
LME prices continued to increase in the fourth quarter. Average three month prices started the quarter at a level of around USD 2,370 per mt and ended around USD 2,470 per mt. Market volatility continued with prices fluctuating within the range of USD 2,250 - 2,500 per mt in the quarter.
Global demand for primary aluminium excluding China increased 4 percent in the fourth quarter compared to the third quarter partly due to customer restocking. Annualized consumption and production amounted to 25.3 million mt and 25.7 million mt respectively. Primary aluminium consumption outside China grew 19 percent from 2009. We expect corresponding growth of about 7 percent in 2011 and somewhat slower growth in 2012. The market is expected to be within a manageable surplus in 2011.
Production in China declined in the fourth quarter by around 10 percent compared to the previous quarter, assumed to be due to the need to meet energy saving targets. Total production amounted to about 17 million mt for 2010. Demand increased by around 2 percent in the fourth quarter resulting in a decline in inventories.
LME stocks were relatively stable around 4.3 million mt during the quarter. Global inventories days have been falling as a result of improved demand.
Demand for metal products, in particular extrusion ingot and sheet ingot was strong and unchanged from the previous quarter. Demand for primary foundry alloys improved in Northern Europe, in particular in Germany and was also stronger in export markets in Asia.
Consumption in the European rolled products market was seasonally lower in the fourth quarter compared with the previous quarter. Demand increased around 17 percent in 2010 compared to 2009, but remained below the peak achieved in 2007. We expect a healthy demand to continue into the first half of 2011.
European demand for extruded aluminium products improved significantly compared to fourth quarter of the previous year, but remained weak within the building and construction sector. In North America demand was seasonally lower compared with the third quarter of 2010, and also lower than the fourth quarter of 2009. Developments in South America continued to be positive, especially in Brazil. Demand for precision tubing remains strong. Overall demand in the European and US extrusion markets is expected to continue to grow into the seasonally stronger first quarter of 2011. Recovery in the building and construction segment is expected to remain slow.
Nordic electricity spot prices increased during the fourth quarter in parallel with deteriorating hydrological conditions. Water reservoir levels in Norway declined to about 45 percent of full capacity by the end of 2010. Snow accumulation levels were 50 percent below normal. Colder weather beginning in the middle of November lifted spot prices further due to very high demand. Prices declined in January due to milder weather and more stable nuclear output, but reservoir levels remain at historically low levels. Prices are expected to remain fairly high throughout the first quarter of 2011.
Additional factors impacting Hydro
Hydro has sold forward substantially all of its primary aluminium production for the first quarter at a price level of around USD 2,325 per mt, excluding expected Qatalum production.
Qatalum is expected to produce roughly 500,000 mt of primary metal in 2011
Hydro's water and snow reservoirs were lower than normal at the end of January and also lower than the corresponding period in 2009. Due to the high spot price levels, Hydro's power production during the first quarter of 2011 is expected to be at same level as for fourth quarter 2010.
Underlying results for Primary Metal declined during the quarter compared to the third quarter mainly due to lower realized aluminium prices partly offset by insurance proceeds relating to the power outage at Qatalum in the previous quarter.
Alumina and raw materials underlying results improved slightly in the quarter compared with the third quarter. For Alunorte, positive effects of higher realized alumina prices were partly offset by lower sales, higher bauxite, caustic costs and other operating costs. Underlying earnings for our alumina commercial activities were somewhat higher than the previous quarter driven by higher volumes and good margins on third party sales contracts.
Lower realized aluminium prices had a negative effect on underlying results for Primary aluminium amounting to about NOK 350 million in the quarter. Our cost improvement program continued according to plan, however, fourth quarter operating costs were somewhat higher than in the third quarter due to seasonal effects.
Operating losses for Qatalum increased in the fourth quarter due to higher depreciation charges and higher fixed costs including costs relating to restart of the ramp up at the plant. Insurance proceeds amounting to NOK 300 million were recorded in the fourth quarter of which NOK 210 million was included in underlying EBIT. Ramp-up of the plant restarted in the middle of September and at the end of the fourth quarter 321 out of 704 cells were fully operational. Final ramp-up to full production capacity will be hampered by delayed commissioning of the power plant steam turbines. It is expected that the plant will reach full output from June 2011.
Underlying EBIT for Metal Markets declined in the fourth quarter. Currency and ingot inventory valuation effects were relatively neutral in the fourth quarter compared with substantial net positive effects in the previous quarter.
Excluding currency and ingot inventory valuation effects, underlying EBIT for Metal Markets also declined in the quarter. Our remelt operations delivered lower underlying results during the quarter mainly due to planned maintenance activities. Lower sales volumes for resale of third party products also had a negative impact on underlying results for the quarter. Underlying results for our metal sourcing and trading activities continued to be firm.
Total metal product sales excluding ingot trading was slightly lower mainly due to seasonally lower shipments of extrusion ingots in all markets.
Underlying EBIT for Rolled Products declined compared to the third quarter of 2010 due to higher operating costs, including costs for planned maintenance activities, and somewhat lower sales volume.
Volume developments varied between our different business sectors. Lithography shipments increased together with a good production performance. General engineering sales were stable while automotive, heat exchanger sales were slightly higher supported by continued firm demand. Volumes for our thin gauge foil, beverage can and other packaging and building products declined mainly due to seasonal maintenance and other capacity constraints. Margins remained firm.
Underlying EBIT for Extruded Products declined compared with the third quarter of 2010 mainly due to higher operating costs and seasonally lower volumes. The cost increases were due to planned maintenance activities and charges for ongoing improvement programs mainly related to rationalization initiatives, the implementation of a new IT system and increased marketing efforts. In the previous quarter, operating costs were positively impacted by seasonally lower employee related costs. Margins were firm for most business sectors in the fourth quarter.
Volumes for our European, North American and South American extrusion operations were all seasonally lower in the fourth quarter. Recovery in the building systems markets continued to lag the general extrusion market, in particular in southern Europe, where demand fell in the fourth quarter due to reduced public spending and increased uncertainty concerning economic developments. As a result, we have initiated further rationalization programs to improve the results of this business.
Underlying EBIT for Energy increased substantially compared to the previous quarter due to higher spot prices and significantly higher production. Cold winter weather, marginal precipitation and outages of nuclear power in Sweden resulted in high spot prices during the period.
Other and eliminations
Underlying EBIT for Other and eliminations amounted to a charge of NOK 277 million for the fourth quarter compared with a charge of NOK 95 million in the previous quarter and a charge of NOK 334 million in the fourth quarter of 2009. Eliminations included in underlying EBIT amounted to a charge of NOK 12 million in the fourth quarter compared with a income of NOK 39 million in the previous quarter and a charge of NOK 108 million in the fourth quarter of 2009.
Underlying results for the fourth quarter included increased costs for integration planning and other transaction costs relating to the Vale aluminium acquisition, as well as year-end adjustments for employee and pension costs.
Items excluded from underlying EBIT and net income
To provide a better understanding of Hydro's underlying performance, the items in the table below have been excluded from EBIT and net income.
Items excluded from underlying EBIT are comprised mainly of unrealized gains and losses on certain derivatives, impairment and rationalization charges, effects of disposals of businesses and operating assets, as well as other items that are of a special nature or are not expected to be incurred on an ongoing basis.
Linked to the agreement to acquire the majority of Vale's aluminium businesses in Brazil (Vale Aluminium) it was decided to hedge the majority of the net aluminium price exposure in Vale Aluminium until the end of 2011. The hedges are aimed at mitigating the risk of a weaker aluminium price and will secure a robust cash flow from the acquired assets in the transition phase. The hedges are not conditional upon completion of the transaction. The significant part of the positions expiring after closing of the transaction are subject to hedge accounting and included in other comprehensive income. Recognized unrealized and realized effects of positions not subject to hedge accounting are classified as items excluded from underlying EBIT.
|Items excluded from underlying net income|
|Unrealized derivative effects on LME related contracts||(162)||515||(728)||489||(2,630)|
|Derivative effects on LME related contracts (Vale Aluminium)||55||99||-||(166)||-|
|Unrealized derivative effects on power contracts||151||(25)||318||609||(198)|
|Unrealized derivative effects on currency contracts||(20)||(65)||(19)||(50)||(345)|
|Unrealized derivative effects on raw material contracts||(156)||-||-||(156)||-|
|Metal effect, Rolled Products||(92)||52||(157)||(560)||588|
|Significant rationalization charges and closure costs||131||-||65||130||518|
|Impairment charges (PP&E and equity accounted investments)||12||114||138||187||438|
|(Gains)/losses on divestments||(7)||-||684||(74)||684|
|Items excluded from underlying EBIT||(180)||690||287||167||(1,148)|
|Net foreign exchange (gain)/loss||(232)||246||(216)||(513)||(2,774)|
|Calculated income tax effect||129||(328)||(275)||80||441|
|Items excluded from underlying net income||(282)||608||(204)||(266)||(3,481)|
Financial income amounted to NOK 292 million in the fourth quarter compared with Financial expense of NOK 218 million in the previous quarter.
Financial income was relatively unchanged in the fourth quarter compared with the previous quarter. Interest expense in fourth quarter is lower than previous quarter due to lower interest on tax claims in Germany.
The net currency gain in the fourth quarter included gains amounting to NOK 274 million relating to intercompany balances denominated in Euro due to a weaker Euro against the Norwegian kroner.1) Other net currency losses amounted to NOK 42 million.
Income tax expense amounted to a charge of NOK 401 million in the fourth quarter compared with a charge of NOK 119 million in the previous quarter and a credit of NOK 183 million in the fourth quarter of 2009.
For 2010 income tax expense was roughly 43 percent of pre-tax income. The tax rate for the year was influenced by the effects of power sur-tax and results from equity accounted investments which are recognized net of tax.
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