• Underlying EBIT NOK 772 million
• Seasonally higher sales volumes
• Increased power production
• Primary aluminium demand outside China continues to exceed production
• Investment in new automotive line and in new recycling capacity

"We see signs of improvement for the aluminium industry as aluminium demand outside China continues to exceed production. Based on increasing use of aluminium in cars and rising demand for recycled metal, we are making investments in our rolled products business in Germany to expand automotive and recycling capacity. At the same time, our ongoing operational improvement efforts continue with unabated strength in all areas," says President and CEO Svein Richard Brandtzæg.

Hydro will invest EUR 130 million in a new automotive production line at its rolled products plant in Grevenbroich, Germany. The new line, expected to be completed in second half 2016, will expand annual capacity for aluminium car body sheets to 200,000 from 50,000 metric tons. Also in the first quarter, Hydro decided to invest EUR 45 million in new recycling capacity in Germany, in line with an ambition to double the company's total recycling capacity by 2020.

Underlying EBIT for the Bauxite and Alumina business area improved compared to fourth quarter of 2013 which included the settlement of claims relating to ICMS taxes. Alumina production for the Alunorte refinery was stable, however, fuel costs increased mainly due to the introduction of ICMS taxation on fuel oil from February 1.

"Alumina production has recovered and stabilized after the problems at the Alunorte refinery last year. Many indicators are now pointing in the right direction, both at Alunorte and at the Paragominas bauxite mine. We are confident that the experience gained will make operations more robust," says Brandtzæg.

Underlying EBIT for Primary Metal was down in the quarter, primarily due to the insurance settlement received in the fourth quarter. Higher product premiums and increased sales volumes were partly offset by higher costs for alumina and power and lower realized LME prices.

Excluding negative currency and ingot inventory effects, underlying EBIT for Metal Markets improved mainly due to higher results from sourcing and trading activities.

Rolled Products underlying EBIT increased in the first quarter due to seasonally higher sales volumes and lower maintenance costs partly offset by lower margins.

Underlying EBIT for Energy increased mainly due to higher power production.

Underlying EBIT for Sapa improved compared to the fourth quarter, influenced by seasonally stronger sales volumes.

Operating cash flow was negative NOK 0.7 billion for the first quarter impacted by a seasonal increase in working capital and a tax payment related to a disputed tax claim in Norway. Net cash used for investment activities amounted to NOK 0.6 billion. Hydro's net debt position amounted to around NOK 0.6 billion at the end of the first quarter.

Reported earnings before financial items and tax amounted to NOK 822 million in the first quarter. Reported EBIT included net unrealized derivative gains amounting to NOK 170 million in total. Reported earnings also included impairment charges of NOK 33 million related to the agreed divestment of Hydro's casthouse in Hannover and charges of NOK 86 million (Hydro's share) in Sapa primarily related to rationalization activities.

Income from continuing operations amounted to NOK 462 million in the first quarter including a net foreign exchange gain of NOK 193 million. In the previous quarter, loss from continuing operations amounted to NOK 758 million including a net foreign exchange loss of NOK 688 million.