Norsk Hydro ASA expects to report an underlying EBIT of approximately NOK 1.6 billion for the second quarter compared to an underlying EBIT of NOK 2.0 billion in the first quarter. While Hydro is realizing a higher aluminium price during the quarter, Hydro is experiencing significant cost increases in the Aluminium Metal business area. The cost increases are mainly related to alumina prices, alumina freight, petroleum coke and other costs.
The Aluminium Products business area will deliver a strong result well above the first quarter while a lower spot price for electricity in Norway will have a negative impact on the results in the Energy business area.
Hydro’s reported EBIT will be significantly negatively impacted by unrealized derivative effects related to Hydro’s long-term power sourcing contracts. The negative effects are a result of increased forward prices for coal and aluminium. Unrealized effects on LME derivatives are positive for the quarter.
Hydro will publish its second quarter results July 22 at 07:30 CET.
Contact Stefan Solberg
Telephone +47 22539280
Cellular +47 91727528
Contact Halvor Molland
Telephone +47 22532421
Cellular +47 92979797
Certain statements included within this announcement contain forward-looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of management’s plans, objectives and strategies for Hydro, such as planned expansions, investments 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, as well as (i) statements preceded by “expected”, “scheduled”, “targeted”, “planned”, “proposed”, “intended” or similar statements.
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 aluminium business; 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.