Higher alumina and aluminium prices boost Hydro’s Fourth quarter 2016 results

Norsk Hydro has reported its forth quarter 2016 results. Hydro's underlying EBIT increased to NOK 1,829 million in Q4 from NOK 1,477 million in Q3 2016. The rise was due to higher realized alumina and aluminium prices, slightly offset by seasonally higher costs and lower aluminium product sales. Hydro expects healthy demand for aluminium and aluminium products, forecasting global primary demand growth at 3-5 % in 2017.

Commenting on the results, Svein Richard Brandtzæg, President and CEO of Hydro said, "Demand for aluminium remains firm and prices have increased, contributing to a solid quarter for Hydro. I am particularly pleased to see more and more car producers choosing aluminium for light-weighting and climate purposes. I am eager to see our new Rolled Products automotive line in Germany ramping up this year to meet the rapidly growing automotive demand."

Highlights:

• NOK 1 829  million of underlying EBIT
• Higher realized all-in aluminium and alumina prices
• Record production at Alunorte and Paragominas
• Rolled Products results down due to lower sales, margins & increased costs
• NOK 1.4 billion Better improvements in 2016 vs NOK 1.1 billion target
• Karmøy Technology Pilot and new automotive line on time and budget
• 2017 global primary demand growth outlook of 3-5% with a balanced market

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Underlying EBIT for the Primary Metal business dropped slightly in the fourth quarter because of lower sales volumes and seasonally higher fixed costs. That was largely offset by higher realized aluminium prices.

"The Karmøy Technology Pilot, aiming to verify the world's most energy and climate-efficient aluminium production, is well under way. We expect the first metal to be produced at the new plant during the fourth quarter 2017," says Brandtzæg.

Underlying EBIT for Metal Markets improved in the fourth quarter, mainly due to improved results from sourcing and trading activities.

For the full year, underlying EBIT decreased to NOK 6,425 million compared with NOK 9,656 million in 2015, mainly due to a decrease in alumina price realization and all-in metal prices. It was compensated by positive currency effects, lower raw material costs and ongoing improvement by the company.  

Hydro’s "Better" improvement ambition targeting NOK 2.9 billion of annual improvements by 2019 has progressed well over the fourth quarter. For 2016, the programme delivered  NOK 1.4 billion of annual improvements exceeding the 1.1 billion target.

Reported earnings before financial items and tax amounted to NOK 1,964 million in the fourth quarter compared to NOK 1,376 million in the previous quarter.

For the full year 2016, reported earnings before financial items and tax amounted to NOK 7,011 million compared to NOK 8,258 million in 2015.

Net income amounted to NOK 1,008 million in the fourth quarter compared to NOK 1,119 million in the previous quarter. In 2016 net income amounted to NOK 6,586 million compared  to NOK 2,333 million in 2015.

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