• Underlying EBIT of NOK 2,215 million
• Historically low implied alumina cost on record bauxite production and currency
• Lower realized alumina and all-in aluminium prices
• Strong downstream development in seasonally weaker quarter
• LoI signed with Vale to raise MRN ownership to 45%
• 2015 global primary aluminium demand outlook ~4%

Underlying EBIT for Bauxite & Alumina increased compared to the second quarter primarily due to a weaker Brazilian Real and increased production at Paragominas and Alunorte. This was partly offset by lower LME-linked and index alumina prices. 
 
"Bauxite production reached record-levels this quarter, reflecting the continued improvement efforts made over the last years in Paragominas. We continue to strengthen our bauxite operation, and have signed a Letter of Intent with Brazilian mining company Vale for the possible acquisition of Vale's 40% interest in the Brazilian bauxite producer MRN," says President and CEO Svein Richard Brandtzæg. The record bauxite production, together with currency effects, also gave a historically low implied alumina cost for the quarter.

Primary Metal underlying EBIT declined in the third quarter due to lower realized premiums and aluminium prices, partly offset by stronger USD and somewhat higher sales volumes.

Underlying EBIT for Metal Markets improved in the third quarter driven by improved results from sourcing and trading activities in addition to positive currency and inventory valuation effects. This was partly offset by lower results from remelt operations due to seasonally lower volume and lower margins in Europe.

Rolled Products underlying EBIT improved compared with the second quarter of 2015 driven by higher shipments and seasonally lower operating cost. The positive effects were partly offset by a lower contribution from the Rheinwerk smelter due to lower all-in metal prices.

"I am pleased to see a stronger quarter in Rolled Products, above what is normal for the third quarter, backed by increased demand for general engineering products," says Brandtzæg.

Underlying EBIT for Energy increased compared to the second quarter, mainly due to high production in third quarter influenced by the delayed spring thaw in the Norwegian mountains. This was largely offset by lower spot prices and higher property taxes.

Underlying EBIT for Sapa decreased compared to the previous quarter, due to seasonally lower sales volumes in Europe. This was partly offset by strong North American market developments with stable metal premiums, while the second quarter results were impacted negatively by sharply falling metal premiums in North America. Improvement programs progressing ahead of plan across the organization also contributed to the results for the quarter.

Operating cash flow amounted to NOK 4.5 billion for the third quarter, including a working capital reduction of NOK 2.1 billion. Cash used for investment activities amounted to NOK 1.2 billion. Hydro's net cash position increased during the third quarter by NOK 2.6 billion to NOK 3.3 billion at the end of the quarter, also affected by currency translation effects of around NOK 0.6 billion mainly due to the strengthening USD compared to NOK.

Reported earnings before financial items and tax amounted to NOK 1,630 million in the third quarter. In addition to the factors discussed above, reported EBIT included net unrealized derivative losses and negative metal effects of NOK 520 million in total. Reported earnings also included a charge of NOK 65 million (Hydro's share) for Sapa net of tax, including NOK 48 million relating to restructuring charges.    

In the previous quarter reported earnings before financial items and tax amounted to NOK 2,698 million including net unrealized derivative gains and positive metal effects of NOK 132 million in total and a compensation of NOK 37 million relating to insurance proceeds. Reported earnings also included a charge of NOK 139 million (Hydro's share) for Sapa, including NOK 106 million relating to restructuring charges.  
 
Net income amounted to negative NOK 1,345 million in the third quarter including a net foreign exchange loss of NOK 3,205 million mainly due to unrealized currency losses on US dollar debt, in particular in Brazil, and embedded derivatives in power contracts denominated in EUR. In the previous quarter, net income was NOK 2,064 million including a net foreign exchange gain of NOK 346 million mainly due to unrealized currency gains on US dollar debt in Brazil.