Hydro rolled product division reports low earning in Q3 2016; automotive demand remains positive

<p>Hydro Q3 results for rolled product has been slow compared to last quarter.<br /><br />Seasonally lower sales volumes and changes in the product mix have pulled down the underlying EBIT in Q3 in comparison to Q2 2016. It was partly offset by positive results from the Neuss smelter driven by an increase in the all-in metal price.<br /><br />On a YOY comparison also, the underlying EBIT declined from the third quarter of 2015, mostly due to lower realized margins, increased cost and negative currency development.<br /><br />Underlying EBIT for the first three quarters of 2016 was lower than in the same period of 2015 due to lower all-in metal price affecting the Neuss smelter result during the period. Hydro completed divestment for its slim rolling mills by December 17, 2015. After that the company saw higher sales volumes but lower realized margins affected the results.<br /><br /><img style="vertical-align: middle; display: block; margin-left: auto; margin-right: auto;" src="http://www.alcircle.com/uploads/images/Products_rolled.jpg" alt="News" width="509" height="200" /><br /><br />Hydro reported that the European demand for flat rolled products declined 1 per cent in Q3 from Q2. However, on a YOY comparison, demand increased by around 3 per cent from the third quarter of 2015.<br /><br />Hydro observed that though demand was slow in Q3 due to summer production shutdowns the overall automotive demand remains positive, driven by increasing application of aluminium for automotive sheet. The building and construction segment has been recovering throughout the quarter. Demand in packaging sector especially in the beverage can segment has been very positive. Foil demand was comparatively weak but the market for engineering products remained solid in the quarter.<br /><br />{googleAdsense}<br /><br />Hydro forecasts a further decline in European demand for flat rolled products in Q4 due to seasonal slow market.<br /><br />Hydro continued with progress on the Rolled Products division under "Better Rolled Products" improvement program. Due to further delays in the ramp up of the UBC-line, Rolled Products division is not expected to reach the 2016 target of NOK 200 million, however, the 2019 target of NOK 900 million remains unchanged.</p>