Hydro had an underlying result before financial items and tax of NOK 688 million in the first quarter 2010. improving significantly from a loss of NOK 651 million in the fourth quarter of 2009, reflecting increased aluminum prices, reduced costs and higher volumes in a seasonally strong quarter, the company says in a statement Tuesday morning.
“We said we’d aim to get stronger from the crisis, and I feel we’ve succeeded”
Svein Richard Brandzæg
"We have seen rising aluminium prices and a partial demand recovery from previous weak quarters, supported by restocking. But global aluminium stocks remain high, indicating continued production overcapacity," Hydro's President and Chief Executive Officer Svein Richard Brandtzæg says in a statement Tuesday morning. "The official opening of the Qatalum plant in April was a milestone for an impressive project. At the end of the quarter, 20 percent of the production cells were in operation, and we are on track for full output in the fourth quarter this year. Qatalum will contribute significantly to Hydro's competitiveness and be an important door-opener to the rapidly growing Asian markets," Brandtzæg adds.
Higher realized aluminium prices contributed to an improvement in underlying results for Hydro’s primary aluminium operations.
Underlying results for alumina and raw material operations were substantially higher, lifted by improved
results from Alunorte and high margins from Hydro’s commercial alumina activities.
Significantly better performance and recaptured trading losses from the prior quarter lifted underlying results for the metal markets business.
Downstream sales were up on restocking and recovering markets. Higher volumes, combined with higher margins and lower costs contributed to a significant improvement in Hydro’s rolled products business.
Underlying EBIT for extrusion businesses was relatively unchanged for the quarter, adjusted for the divestment
of Automotive Structures in the fourth quarter.
Volumes increased for all operating units with the exception of a seasonal decline in building systems
shipments. Margins were stable.
“Overall, we expect demand in our main upstream and downstream markets to grow around 12 percent in 2010. But there is challenging terrain ahead of us, and we will maintain a strong cost focus across our businesses to ensure efficient operations and continous improvements along our value chain,” Brandtzæg says.
Underlying EBIT for Hydro’s energy business increased substantially from the fourth quarter of 2009, mainly due to high spot power prices and high production.
Net cash generated from operating activities amounted to NOK 186 million for the quarter.
Investments amounted to NOK 1.8 billion, including about NOK 1.1 billion relating to Qatalum. Qatalum investments are expected to be somewhat lower in the second quarter of 2010.
Hydro had a net cash position of NOK 0.5 billion at the end of the first quarter 2010.
Revenue: 18 145 16 427(Q4 2009)
Underlying EBIT 688 (651) (Q4 2009)
Net income (loss) 924 (587) (Q4 2009)
Earnings per share 0.72 (0.47) (Q4 2009)
* Outlook for 2010: 12 percent growth in aluminium demand in main markets
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