11 FEBRUARY 2016Hydro Press Release
Hydro - Sapa JV : Announcement of results for Q4 2015
Edited by : AL CIRCLE
2 min read
Aluminium major Norsk Hydro announced the fourth quarter 2015 results of its joint venture with Sapa.
Compared to the previous quarter, underlying EBIT for Sapa declined mainly due to seasonally lower demand. Underlying EBIT for Sapa increased compared to the same quarter of the previous year mainly due to the effects of the improvement programs, continued growth in North American demand and increased added value operations. Underlying EBIT for the fourth quarter was negatively affected by Sapa's measures to address, and consequences of, unsanctioned quality testing practices in North America.
The restructuring program initiated in 2013, targeting annual synergies of around NOK one billion by the end of 2016, reached its target in 2015, one year ahead of time. In addition to the factors mentioned above, reported EBIT for the fourth quarter was affected by charges related to restructuring activities, partly offset by unrealized gains from derivatives.
Underlying EBIT for 2015 improved compared with 2014 supported mainly by internal improvements and strong performance in the North American operation. Positive effects from a weakening Norwegian krone was offset by sharply falling metal premiums. Net interest-bearing debt at the end of 2015 amounted to roughly NOK 1.8 billion, which is at the same level as when the Sapa joint venture was established on September 1, 2013.
Market
Demand for extruded products in North America decreased by 9 percent compared to the previous quarter, due to seasonality. Compared to the same quarter of the previous year demand increased 1 percent as a result of increased building and construction activity and strong automotive demand. For the full year, North American extrusion demand grew 5 percent over 2014.
In Europe, extruded products demand declined 7 percent compared with the previous quarter, due to seasonality. Demand was overall stable both for the full year and the quarter when compared to the previous year. A weak European building and construction market was offset by most other segments.
Demand for extruded products is expected to seasonally improve going into the first quarter of 2016.
Compared to the previous quarter, underlying EBIT for Sapa declined mainly due to seasonally lower demand. Underlying EBIT for Sapa increased compared to the same quarter of the previous year mainly due to the effects of the improvement programs, continued growth in North American demand and increased added value operations. Underlying EBIT for the fourth quarter was negatively affected by Sapa's measures to address, and consequences of, unsanctioned quality testing practices in North America.
The restructuring program initiated in 2013, targeting annual synergies of around NOK one billion by the end of 2016, reached its target in 2015, one year ahead of time. In addition to the factors mentioned above, reported EBIT for the fourth quarter was affected by charges related to restructuring activities, partly offset by unrealized gains from derivatives.
Underlying EBIT for 2015 improved compared with 2014 supported mainly by internal improvements and strong performance in the North American operation. Positive effects from a weakening Norwegian krone was offset by sharply falling metal premiums. Net interest-bearing debt at the end of 2015 amounted to roughly NOK 1.8 billion, which is at the same level as when the Sapa joint venture was established on September 1, 2013.
Market
Demand for extruded products in North America decreased by 9 percent compared to the previous quarter, due to seasonality. Compared to the same quarter of the previous year demand increased 1 percent as a result of increased building and construction activity and strong automotive demand. For the full year, North American extrusion demand grew 5 percent over 2014.
In Europe, extruded products demand declined 7 percent compared with the previous quarter, due to seasonality. Demand was overall stable both for the full year and the quarter when compared to the previous year. A weak European building and construction market was offset by most other segments.
Demand for extruded products is expected to seasonally improve going into the first quarter of 2016.
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