Q4 2008: Results fall on write-downs, weak markets

Hydro's underlying EBIT was NOK 868 million in the fourth quarter, including inventory write-downs of about NOK 700 million. Underlying EBIT amounted to NOK 1,490 million in the third quarter and 1,699 million in the fourth quarter of 2007. Hydro's results for the quarter reflect the ongoing financial crisis, which has led to a dramatic drop in aluminium prices as a result of a sharp fall in global demand.

February 18, 2009

Underlying EBIT for the full-year 2008 fell to NOK 6,009 million from the solid result of NOK 10,153 million in 2007, as higher raw material costs affecting the entire industry had a substantial impact on Hydro's results in addition to the economic downturn in the fourth quarter.
 
"Hydro has acted quickly and decisively in response to the unprecedented drop in aluminium markets toward the end of last year," President and CEO Eivind Reiten said. "We have a very demanding year ahead of us, and we will continue to take proactive measures to meet the unprecedented market conditions," he said.
 
"Improving Hydro's competitive position will be our key focus in 2009," Reiten said. "Progressing Qatalum according to plan will be a top priority, moving Hydro's smelter system down the industry cost curve and ensuring that we emerge as a stronger company when markets normalize."
 
Hydro has made wide-ranging adjustments in response to the severe drop in aluminium markets, and has announced reductions in its primary aluminium production of 23 percent, representing about 400,000 tonnes per year of high-cost production capacity, which will improve the average cost of Hydro's smelter system. Approximately 140,000 tonnes of the total will be shut down by the end of the first quarter of 2009, with the remainder to be shut down by the end of the second quarter of 2009.
 
Production of remelted metal at Hydro's casthouses has been cut by 45 percent, or around 500,000 tonnes per year, and alumina production at the part-owned Alpart refinery in Jamaica has been reduced by 50 percent. Hydro has also taken out significant capacity in its downstream operations through shift-reductions and implemented cost-cutting measures throughout the company.
 
Due to demanding markets and low forward visibility in both the aluminium and financial markets, Hydro's Board of Directors proposes to forgo a dividend payment for 2008. With Hydro's substantial investment program resulting from the Qatalum project and the high cost of raising capital in financial markets, the Board regards it as prudent to conserve the company's cash resources to reduce funding requirements.
 
Underlying EBIT for Aluminium Metal declined significantly from both the previous quarter and the fourth quarter of 2007. Results were impacted by inventory write-downs of about NOK 700 million relating to primary aluminium and remelting operations following the historic fall in aluminium prices during the quarter. Underlying results were positively affected by higher realized prices measured in Norwegian kroner, due to the strengthening of the US dollar during the quarter.
 
Underlying results for bauxite and alumina operations improved from the third quarter despite sharply lower realized alumina prices in US dollars. Production increased at the part-owned Alunorte refinery following start-up of the expansion in the third quarter and the plant operated at close to full capacity throughout the fourth quarter. Energy costs for Alunorte declined due to a significant drop in oil prices and improved energy mix.
 
Hydro's joint venture with Qatar Petroleum on the 585,000-tonne Qatalum smelter, in which Hydro owns 50 percent, was about 60 percent complete by the end of the year, on schedule and within budget frame for start-up around year-end 2009 and ramp-up to full production during 2010. Once on stream, Qatalum will be one of the most cost-efficient smelters in the world.
 
Aluminium Products incurred an underlying loss for the quarter, down significantly from both the third quarter of 2008 and the fourth quarter 2007, as results were hit by a sharp drop in demand. Volumes were relatively stable for the building systems business, and overall extrusion margins remained at a satisfactory level despite the significant market decline. Underlying results for US operations remained at depressed levels. Automotive incurred substantial losses compared to both the third quarter of 2008 and fourth quarter of the previous year.
 
Energy delivered record underlying results both for the quarter and the year, mainly due to high power production and continued strong spot prices. Hydro's solar operations recorded an underlying loss in the quarter.
 
Net cash provided by operating activities was NOK 2.9 billion for 2008, down from NOK 14.3 billion in 2007. Hydro had a net cash position amounting to NOK 3.5 billion at the end of 2008.

Key financial information
NOK million, except per share data Fourth
quarter
2008
Third
quarter
2008
% change prior quarter Fourth quarter
2007
% change prior year quarter Year
2008
Year
2007
 
               
Revenue 21,368 21,765 (2) % 21,651 (1) % 88,643 94,316
               
Earnings before financial items and tax (EBIT) (3,106) 2,414 >(100)% 338 >(100)% 1,194 9,025
Items excluded from underlying EBIT 3,975 (924)   1,361   4,815 1,128
Underlying earnings before financial items and tax (EBIT) 868 1,490 (42) % 1,699 (49) % 6,009 10,153
               
Underlying earnings before financial items and tax (EBIT) :              
Aluminium Metal 435 932 (53) % 1,333 (67) % 3,575 8,265
Aluminium Products (239) 322 >(100)% 74 >(100)% 988 1,352
Energy 592 475 25 % 341 73 % 1,736 1,184
Corporate, other and eliminations 81 (239) >100% (50) >100% (290) (647)
Underlying earnings before financial items and tax (EBIT) 868 1,490 (42) % 1,699 (49) % 6,009 10,153
               
Income (loss) from continuing operations (5,845) 233 >(100)% 527 >(100)% (3,267) 9,158
               
Underlying income (loss) from continuing operations (184) 1,075 >(100)% 1,411 >(100)% 3,579 8,057
               
Earnings per share from continuing operations (4.99) 0.06 >(100)% 0.36 >(100)% (3.04) 7.17
               
Underlying earnings per share from continuing operations (0.29) 0.75 >(100)% 1.09 >(100)% 2.62 6.26
               
Financial data:              
Investments 2,749 2,443 13 % 2,173 26 % 9,012 5,206
Adjusted net interest-bearing debt (15,440) (5,491) >(100)% (842) >(100)% (15,440) (842)
               
               
Operating statistics              
Realized aluminium price LME (USD/mt) 2,654 2,848 (7) % 2,485 7 % 2,638 2,561
Realized aluminium price LME (NOK/mt) 16,904 15,114 12 % 14,138 20 % 14,724 15,521
Primary aluminium production (kmt) 442 439 1 % 439 1 % 1,750 1,742
Rolled Products sales volumes to external market (kmt) 213 240 (11) % 246 (13) % 965 1,030
Extrusion sales volumes to external market (kmt) 103 122 (15) % 117 (12) % 488 508
Automotive sales volumes to external market (kmt) 18 26 (32) % 29 (39) % 105 117
Power production (GWh) 2,813 2,677 5 % 2,321 21 % 11,361 11,018

Reported EBIT and income from continuing operations
Reported EBIT for Hydro amounted to a loss of NOK 3,106 million for the quarter including charges of roughly NOK 2.5 billion, comprised of impairment losses of NOK 2,150 million due to the deteriorating market conditions and high input costs, and write-downs of roughly NOK 300 million relating to our minority interests in solar businesses. Reported EBIT for the quarter also included substantial net unrealized losses on LME derivative contracts of about NOK 2.0 billion, net unrealized gains on power contracts of about NOK 1.5 billion and other net negative effects of roughly NOK 1 billion. Reported EBIT for the third quarter of NOK 2,414 million was impacted by significant net unrealized gains on power contracts of about NOK 1 billion.
 
Reported Income from continuing operations amounted to a loss of NOK 5,845 million in the fourth quarter including net foreign exchange losses of NOK 4.6 billion. Approximately half of the losses related mainly to Hydro's US dollar hedging program. The remainder related to losses on intercompany balances denominated in Euro. The Euro losses have no cash effect and are offset in equity by translation of the corresponding subsidiaries during consolidation. During the quarter, both the US dollar and Euro have strengthened against the Norwegian kroner by about 18 percent. Reported Income from continuing operations amounted to NOK 233 million in the third quarter including net unrealized and realized foreign exchange losses of NOK 2,015 million.
 
Market developments and outlook
The severe downturn in the global economy has led to a sharp decline in demand for aluminium and rapidly increasing stocks. The LME three month price for aluminium continued its sharp decline in fourth quarter falling from USD 2,446 per mt at the end of September to a low of USD 1,464 per mt in December before closing the year at USD 1,497 per mt. By year-end prices reached a level that is lower than the cash-costs of a substantial portion of global smelter production. The decline from the high price levels experienced in the beginning of the third quarter of 2008 was of a magnitude which is unprecedented in the history of the aluminium industry. In response, announced smelter curtailments reached a global level of around 1.5 million mt per year excluding China as of the end of 2008, and have increased further to around 3.2 million mt.
 
The market for metal products (extrusion ingot, sheet ingot, foundry alloys and wire rod) in Europe and North America weakened dramatically during the fourth quarter of 2008. The automotive markets collapsed leading to a sharp decrease in demand, mainly for foundry alloys but also for the other metal products. In addition, the building and construction markets in US and Europe deteriorated significantly leading to reduced demand.
 
Outlook for Hydro
Hydro has taken decisive proactive measures responding to the extreme market developments by closing or idling substantial production capacity. In order to secure our on-going operations, we are reviewing our global network of primary aluminium plants closing, idling or curtailing production in high cost units. We have identified additional areas both upstream and downstream for potential measures to reduce costs and preserve cash and we are in process of reviewing the size and structure of our administrative staff functions. Company-wide initiatives to capitalize on falling commodity prices have been implemented. Together these initiatives are expected to result in significant cost reductions in 2009.
 
At the end of 2008, Hydro had sold 85 percent of its metal production for the first quarter of 2009 forward for an average price of USD 1,872 per mt. Production of primary metal is expected to be about 10 percent lower in the first quarter as a result of the curtailments described above. Despite the curtailments and cost reduction initiatives described above, Hydro expects significantly lower earnings for its Aluminium metal operations in the first half of 2009.
 
Our business activities expose us to the risk that one or more counterparties may default on their obligations, resulting in direct financial loss, an unexpected increase in market exposure or higher operating costs. Weak and deteriorating economic conditions on a global, regional or industry sector level, combined with challenging financial markets, increase the risk of defaulting counterparties. So far we have not experienced any significant defaults and are carefully monitoring the situation.
 
Hydro is currently investing heavily in organic growth with its 50 percent interest in the Qatalum smelter representing the single, most important development. Approximately fifty percent of the estimated USD 5.6 billion cost of the plant is funded by project financing on favorable terms. An existing USD 1.7 billion multi-currency stand-by credit facility is also fully available. Due to our present high investment level and expected lower level of cash generated from operations, Hydro is in the process of raising additional financing to meet future capital requirements. In order to secure our financial position, capital expenditures (excluding Qatalum) have been reduced by roughly 40 percent from the 2008 expenditures of NOK 6 billion through postponement of non-critical projects.

Aluminium Metal
Underlying EBIT for Aluminium Metal declined significantly from both the third quarter of 2008 and fourth quarter of 2007. Results for the quarter were impacted by inventory write-downs of roughly NOK 700 million mainly due to the substantial decline in aluminium prices towards the end of the year. Realized prices measured in Norwegian kroner increased in the quarter having a positive effect on underlying results. The price increase reflected the significant strengthening of the US dollar during the quarter.
 
Underlying results for our Bauxite and Alumina operations improved from the third quarter of 2008 and fourth quarter 2007 despite sharply lower realized alumina prices in USD due to the decline in LME prices. Production increased and energy costs declined due to a significant drop in power prices and improved energy mix. Underlying results from Alpart declined due to the drop in the realized alumina prices.
 
Despite the increase in realized aluminium prices, underlying EBIT for our Primary Aluminium operations declined compared to both the third quarter of 2008 and fourth quarter of 2007 impacted by cost increases and the inventory write-downs discussed above. Volumes from our casthouses declined due to the increasingly difficult markets for our products. Our Commercial activities delivered an underlying loss in the quarter impacted by inventory write-downs and the significant market decline.
 
Underlying EBIT for the year 2008 declined significantly, impacted by lower realized prices and substantial increases in the cost of power and fossil fuels, freight, caustic, alloying materials and carbon in addition to the effect of the inventory write-downs discussed above. Prices measured in Norwegian kroner declined, having a negative impact on underlying results.

Outlook
Since the end of the year, prices have reached the lowest level in more than five years of USD 1,316 per mt. Aluminium prices are expected to remain low in the medium-term, but there is limited forward visibility and significant uncertainty regarding developments.
 
The significant drop in demand for aluminium has resulted in declining demand for raw materials and smelter input costs are falling. The cost of alumina is normally linked to aluminium prices and therefore price adjustments are relatively quick. Significant curtailments in alumina production have also been announced as a result of planned smelter shutdowns, in particular in China. Prices for other important raw materials are also declining but with a somewhat longer time lag to the decline in aluminium prices. However, there are indications that energy prices in Europe and the US, although trending downwards, will remain elevated.
 
Demand within main aluminium market segments is expected to remain depressed, a situation that could continue throughout the entire year. There is substantial uncertainty regarding the timing of a recovery.
 
Global primary aluminium consumption excluding China could potentially decline by up to 10 to 15 percent in 2009 from a consumption level of 25 million mt in 2008. Chinese consumption of primary aluminium may fall slightly from the 2008 level of 12.5 million mt.
 
Outlook for Hydro
Hydro has taken decisive, proactive measures in response to the extreme market developments beginning with the reduction of metal products based on remelted metal at our primary based casthouses and cutting production at our stand-alone remelters. This was quickly followed by decisions to close or idle primary capacity, focusing on the operations in our portfolio with the highest costs. A decision was taken for the early closure of the Søderberg line at our Karmøy plant, which was due to be shut-down at the end of 2009. This facility, which has an annual capacity of about 120,000 mt, will be closed by the end of the first quarter of 2009. We also decided, together with our partner Rio Tinto Alcan, to reduce primary production at the Søral aluminium smelter in Norway by around 50 percent (Hydro's share about 44,000 mt per year). Electrolysis production at our Neuss smelter in Germany, which has a total annual capacity of about 230.000 mt will be temporarily shut down. Production cost at Neuss is significantly higher than our average smelter costs due to high power prices in Germany. Casthouse operations at Neuss will continue. In total, curtailment measures taken will lead to reductions of approximately 400,000 mt per year of higher cost capacity further improving the average cost of our smelter system.
 
In January 2009, a decision was taken by the partners of Alpart, an alumina refinery in Jamaica, to reduce production by 50 percent corresponding to approx 290,000 mt per year of alumina for Hydro's share (35 percent). The reduction in supply corresponds to about 150,000 mt of primary aluminium. Further measures are under evaluation.
 
Hydro is taking initiatives towards its suppliers to capitalize on falling commodity prices which will lead to input cost reductions at Hydro's smelters during the first half of 2009. Alumina prices which are linked to LME prices will be reduced as will other important raw material prices such as petroleum coke where a significant decline in price has already occurred.
 
At the end of 2008, Hydro had sold 85 percent of its metal production for the first quarter of 2009 forward for an average price of USD 1,872 per mt. Production of primary metal is expected to be about 10 percent lower in the first quarter as a result of the curtailments described above. Despite the curtailments and cost reduction initiatives described above, Hydro expects significantly lower earnings for its Aluminium metal operations in the first half of 2009.
 
Aluminium Products
Our Aluminium Products business incurred an underlying loss of NOK 239 million for the quarter, down significantly from both the third quarter of 2008 and fourth quarter of the previous year. Results were heavily impacted by a sharp drop in demand resulting from the deepening financial and economic crisis.
 
Underlying results for our Rolled Products business were significantly impacted by the negative economic developments in addition to seasonally lower demand. Our Extrusion business delivered an underlying loss in the quarter due to a sharp drop in volumes beyond the normal seasonal decline. Volumes were relatively stable for our Building Systems business, however, and overall margins remained at a good level despite the significant market decline. Underlying results for our US operations remained at depressed levels, however, results for our South American operations continued to be strong. Our Automotive operations incurred substantial losses compared to both the third quarter of 2008 and fourth quarter of the previous year due a sharp decline in volume.
 
Underlying EBIT declined for our Aluminium Products business for 2008 as a whole compared to 2007. Our Rolled Products business delivered improved underlying results with positive margin developments offsetting volume declines. Our European extruders outperformed a general market decline for the first nine months of 2008, but underlying results declined for the year heavily impacted by market decline in the final quarter. Underlying results for our US operations also improved from 2007 during the first nine months, driven by significant cost reductions, but the market turbulence in the final quarter of 2008 more than offset the positive developments. Underlying results for our South American operations improved for the year compared to 2007. Significantly lower volumes also impacted underlying results for 2008 for our Automotive operations compared to the previous year. In addition, our Automotive business incurred costs related to start-up of new product lines as well as costs for reducing capacity to meet current market conditions.

Outlook
Market demand for flat rolled products in Europe is expected to continue declining during the coming months, driven by lower demand from most markets and in particular the automotive and engineering market segments. The stronger US dollar is expected to reduce pressure on margins from potential US exports to Europe. However, we expect increasing margin pressure as producers are forced to reduce capacity utilization as a result of weakening demand. Cost pressure, mainly driven by energy and raw material prices, is expected to ease due to the negative economic developments and lower oil prices. However, developments are uncertain and volatility in the commodity markets will impact cost levels going forward.
 
The overall outlook for the European extrusion market is weak with lower demand across most market segments, in particular the automotive and transportation segments. Demand in the Northern regions is stronger than Southern Europe. The negative market outlook is expected to result in increased pressure on margins. In the US, extrusion markets are expected to remain severely depressed, with no signs of recovery. South American markets are expected to experience continued growth, but at a lower pace.
 
Demand in North American automotive market shows no signs of recovering from the very low levels of previous quarters. Automotive demand in Asia and South America show signs of weakening from the robust levels experienced previously.
 
The deepening global economic crisis is resulting in significant market uncertainty, in particular the capital intensive transport and building markets. We also expect the ongoing turmoil in the credit markets to continue to heavily impact developments in these markets.
 
Outlook for Hydro
Measures to significantly reduce costs and manning in our US extrusion operations were carried out in 2007 and continued in 2008. Improvement initiatives were also implemented resulting in substantial cost savings and manning reductions in our North American precision tubing business and our world wide automotive structures operations. Our focused efforts to improve the profitability of these businesses have helped prepare us for the sudden and dramatic market developments which occurred towards the end of the year but can only partly compensate for the unprecedented fall in market demand. As the impact of the global recession influences European markets, further actions across all of our business sectors have been identified including additional shift and manning reductions, procurement initiatives to capitalize on falling raw material prices as well as reductions in capital expenditures and working capital. These measures will enable us to meet market pressures as the on-going recession in Europe and the US impacts demand during 2009.

Energy
Underlying EBIT for Energy improved significantly from the third quarter of 2008 mainly due to higher power production and continued strong spot prices. Power production in the fourth quarter has been higher than expected, primarily due to higher reservoir precipitation than normal during the period. The improvement compared with the fourth quarter of 2007 was due to significantly higher power production and spot prices.
 
Direct power production costs increased by 31 percent compared with the third quarter of 2008, mainly due to higher transmission costs and higher maintenance activity.
 
Hydro's solar activities recorded an underlying loss of NOK 52 million in the fourth quarter of 2008 compared with a loss of NOK 19 million in the third quarter and a loss of NOK 49 million in the fourth quarter of 2007.
 
Energy's underlying EBIT for the full year of 2008 improved by 47 percent compared with 2007. The increase was mainly due to significantly higher spot prices and somewhat higher power production than the high level experienced in 2007. Solar activities reported a loss of NOK 130 million for the full year 2008.

Outlook
Nordic power prices have declined further during the first weeks of 2009 but high winter consumption of power and lower than normal water reservoir levels in Norway and Sweden are expected to support power prices at a fairly high level throughout the first quarter of 2009. While power prices in the Nordic region will continue to be impacted by local market conditions, including hydrological conditions, price levels going forward are expected to be negatively impact by the general economic downturn and lower power prices on the European Continent.
 
Water reservoir levels in Norway were about 65 percent of full capacity in early January 2009, which is 5 percent points lower than normal and 9 percent points lower than the same period in 2008.
 
The planned recovery of the reduced import/export transmission capacity from Southern Norway has been significantly delayed. The Norwegian system operator, Statnett, does not expect all transmission lines to be fully operational before May 2009.
 
Hydro's power production is expected to remain at a seasonally high level in the first quarter of 2009. However, production plans will be influenced by the reservoir situation and power market developments.

Corporate, other and eliminations
Underlying EBIT for Corporate, other and eliminations amounted to NOK 81 million in the fourth quarter compared with a negative NOK 239 million in the third quarter of 2008 and a negative NOK 50 million in the fourth quarter of 2007. Underlying EBIT included an elimination of unrealized profits on inventories purchased from group companies amounting to a credit of NOK 273 million in the fourth quarter compared to NOK 63 million and NOK 38 million in the third quarter of 2008 and fourth quarter of 2007, respectively. The amount for the third quarter included charges of NOK 150 million relating to a change in the allocation of corporate overhead costs which was offset by positive adjustments included in underlying EBIT for the business areas, mainly Aluminium Metal (NOK 89 million) and Aluminium Products (NOK 76 million).

Items excluded from underlying EBIT and income from continuing operations
To provide a better understanding of Hydro's underlying performance, the items in the table below have been excluded from EBIT and income from continuing operations.
 
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.

Items excluded from underlying income from continuing operations
NOK million Fourth
quarter
2008
Third
quarter
2008
Fourth
quarter
2007
Year
2008
Year
2007
 
Unrealized derivative effects on LME related contracts 1,984 35 101 1,120 131
Unrealized derivative effects on power contracts (1,481) (1,038) 666 768 928
Unrealized derivative effects on currency contracts 265 150 (5) 314 (137)
Metal effect, Rolled Products 407 (38) 300 235 235
Significant rationalization charges and closure costs 109 - 55 109 224
Impairment charges (PP&E and equity accounted investments) 7) 2,464 - - 2,464 144
Loss provisions (power contracts) 257 -   257 -
(Gains)/losses on divestments (29) (34) (5) (453) (641)
Correction of elimination of profit in inventory - - 296 - 291
Germany, change in tax rate - - (47) - (47)
Items excluded from underlying EBIT 3,975 (924) 1,361 4,815 1,128
Net foreign exchange (gain)/loss 4,629 2,015 (74) 5,491 (2,254)
Calculated income tax effect (2,943) (248) (353) (3,460) 325
Germany, change in tax rate - - (50) - (300)
Items excluded from underlying income from continuing operations 5,661 843 884 6,846 (1,101)

Finance
Finance expense amounted to NOK 4,487 million in the quarter, compared with NOK 1,980 in the previous quarter. During the quarter, both the US dollar and Euro have strengthened against the Norwegian kroner resulting in net foreign exchange losses of about NOK 4.6 billion. Approximately half of the losses related mainly to Hydro's US dollar hedging program. The remainder related to losses on intercompany balances denominated in Euro. The Euro losses have no cash effect and are offset in equity by translation of the corresponding subsidiaries during consolidation.
 
Interest income increased in fourth quarter compared to third quarter due to interest earnings related to tax claims.
 
At end of 2008 cash and cash equivalents amounted to NOK 3.3 billion down from NOK 9.3 billion at the end of 2007.

Tax
Income taxes amounted to a positive NOK 1,748 million in the fourth quarter compared with a charge of NOK 201 million in the third quarter of 2008 and a positive amount of NOK 58 million in the fourth quarter of 2007. For the year 2008, Income taxes amounted to a positive NOK 565 million compared with a charge of NOK 3,075 million for 2007 representing about 15 percent and 25 percent of Income from continuing operations before tax respectively.
 
Positive Income taxes for the fourth quarter of 2008 and for the year as a whole result from the operating losses incurred in these periods. Income taxes for 2008 were also influenced by tax charges related to power surtaxes amounting to roughly NOK 500 million.

Press contact
Contact      Halvor Molland
Telephone  +47 22532421
Cellular      +47 92979797
Email         Halvor.Molland@hydro.com

Investor contact
Contact      Stefan Solberg
Telephone  +47 22539280
Cellular     +47 91727528
Email         Stefan.Solberg@hydro.com


*************
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.


Updated: October 11, 2016