- Underlying EBIT NOK 138 million
- Lower raw material costs
- Lower realized aluminium prices, higher alumina prices
- Higher power prices and production in Energy
- 2013 aluminium demand growth outlook 2-4 % in world outside China
- Proposed 2012 dividend NOK 0.75 per share
"On the back of continuing challenging markets, our focus remains on improving performance across our value chain. The ambitious USD 300 program is expected to be completed at the end of 2013, strengthening Hydro's industry position. Our improvement efforts will continue, including plans to optimize production and performance in our bauxite and alumina operations in Brazil," Hydro's President and CEO Svein Richard Brandtzæg said.
Bauxite & Alumina's underlying EBIT improved compared to the third quarter, due to higher alumina prices and lower energy costs for Alunorte, together with higher results from commercial operations.
Underlying EBIT for Primary Metal improved compared to the third quarter, mainly due to better results in Qatalum. Lower realized aluminium prices negatively affected underlying EBIT, partly offset by lower operating costs. Savings targeted for Hydro's cost improvement program were achieved for the year.
Excluding inventory and currency effects, underlying results for Hydro's Metal Markets operations declined, mainly due to lower volumes and margins together with lower results from sourcing and trading operations.
Underlying EBIT for Rolled Products declined compared with the third quarter, impacted by lower margins and seasonally higher maintenance costs.
Underlying EBIT for Energy increased in the quarter due to seasonally higher production and prices.
Other and eliminations includes a significant negative charge related to elimination of unrealized gains and losses on internal inventories.
Operating cash flow was NOK 2.8 billion for the quarter. Net cash used for investment activities amounted to NOK 1.0 billion. Hydro's net cash position was around NOK 1.7 billion at the end of the fourth quarter.
For the full year 2012, underlying EBIT declined substantially to NOK 1,158 million from NOK 5,982 million in 2011. Lower aluminium prices and alumina prices had a significant effect on underlying results for the year. Ongoing efforts to reduce costs and improve operations partly offset the negative market effects.
On October 15 Hydro announced an agreement with Orkla ASA to combine their respective extrusion profile, building systems and tubing businesses in a new joint venture company to be named Sapa. Completion of the transaction is expected to take place in the first half of 2013, following approval by the relevant competition authorities. Following the agreement, operating results for Hydro's Extruded Products are presented net of financial items and tax as Income (loss) from discontinued operations and excluded from reported EBIT and underlying EBIT.
Hydro's Board of Directors proposes to pay a dividend of NOK 0.75 per share for 2012, reflecting the company's strong commitment to provide a cash return to its shareholders. The dividend reflects our operational performance for 2012 and a strong financial position, also taking into consideration the uncertain market outlook.
Earnings before financial items and tax amounted to NOK 669 million in the fourth quarter, including net unrealized derivative gains and positive metal effects of NOK 555 million and other items amounting to negative NOK 23 million.
In the previous quarter, Hydro incurred a reported loss before financial items and tax of NOK 267 million, including net unrealized derivative losses and negative metal effects of NOK 137 million and other items amounting to negative NOK 112 million. Other items included impairments of non current assets of NOK 140 million and a gain of NOK 68 million relating to pensions.
Income from continuing operations amounted to NOK 364 million in the fourth quarter including net foreign exchange loss of NOK 102 million. In the previous quarter, Hydro incurred a net loss from continuing operations of NOK 64 million, including net foreign exchange gains of NOK 282 million.
Loss from discontinued operations amounted to NOK 251 million in the quarter, including rationalization and closure costs of NOK 174 million. In the third quarter, loss from discontinued operations amounted to NOK 167 million, including rationalization and closure costs of NOK 43 million and a loss on disposal of Portalex amounting to NOK 144 million.
| Key financial information | |||||||
| NOK million, except per share data | Fourth quarter 2012 | Third quarter 2012 | % change prior quarter | Fourth quarter 2011 | % change prior year quarter | Year 2012 | Year 2011 |
| Revenue | 15,585 | 14,722 | 6% | 17,157 | (9)% | 64,181 | 71,500 |
| Earnings before financial items and tax (EBIT) | 669 | (267) | >100% | 46 | >100% | 432 | 10,068 |
| Items excluded from underlying EBIT | (532) | 249 | >(100)% | 1,176 | >(100)% | 725 | (4,086) |
| Underlying EBIT | 138 | (19) | >100% | 1,223 | (89)% | 1,158 | 5,982 |
| Underlying EBIT: | |||||||
| Bauxite & Alumina | (73) | (386) | 81% | 159 | >(100)% | (791) | 887 |
| Primary Metal | 53 | (10) | >100% | 484 | (89)% | 314 | 2,486 |
| Metal Markets | 69 | 7 | >100% | (39) | >100% | 208 | 441 |
| Rolled Products | 71 | 214 | (67)% | 86 | (17)% | 640 | 673 |
| Energy | 322 | 220 | 47% | 441 | (27)% | 1,459 | 1,883 |
| Other and eliminations | (305) | (64) | >(100)% | 92 | >(100)% | (672) | (389) |
| Underlying EBIT | 138 | (19) | >100% | 1,223 | (89)% | 1,158 | 5,982 |
| Underlying EBITDA | 1,216 | 1,114 | 9% | 2,493 | (51)% | 5,687 | 10,497 |
| Underlying income (loss) from continuing operations | 58 | (37) | >100% | 1,035 | (94)% | 509 | 3,947 |
| Underlying income (loss) from discontinued operations | (59) | 17 | >(100)% | (159) | 63% | (5) | (1) |
| Underlying net income (loss) | 0 | (20) | 100% | 876 | (100)% | 504 | 3,947 |
| Underlying earnings per share | 0.00 | 0.00 | - | 0.42 | (100)% | 0.26 | 1.89 |
| Net income (loss) | 113 | (231) | >100% | (749) | >100% | (1,246) | 6,749 |
| Earnings per share | 0.07 | (0.14) | >100% | (0.36) | >100% | (0.61) | 3.41 |
| Financial data: | |||||||
| Investments | 1,107 | 806 | 37% | 3,907 | (72)% | 3,382 | 47,510 |
| Adjusted net interest-bearing debt | (8,271) | (13,678) | 40% | (19,895) | 58% | (8,271) | (19,895) |
| Key operational information | |||||||
| Alumina production (kmt) | 1,397 | 1,441 | (3)% | 1,490 | (6)% | 5,792 | 5,264 |
| Primary aluminium production (kmt) | 485 | 484 | - | 539 | (10)% | 1,985 | 1,982 |
| Realized aluminium price LME (USD/mt) | 1,940 | 2,022 | (4)% | 2,439 | (20)% | 2,080 | 2,480 |
| Realized aluminium price LME (NOK/mt) | 11,069 | 11,856 | (7)% | 13,834 | (20)% | 12,047 | 13,884 |
| Realized NOK/USD exchange rate | 5.71 | 5.86 | (3)% | 5.67 | 1% | 5.79 | 5.60 |
| Metal products sales, total Hydro (kmt) | 731 | 794 | (8)% | 804 | (9)% | 3,254 | 3,303 |
| Rolled Products sales volumes to external market (kmt) | 226 | 228 | (1)% | 215 | 5% | 909 | 929 |
| Power production (GWh) | 2,448 | 2,157 | 13% | 2,706 | (10)% | 10,307 | 9,582 |
Published: February 12, 2013