Hydro’s Q1 2017 results up on higher prices, offset by higher raw material costs

Norsk Hydro reports positive first quarter 2017 results driven by higher realized all-in metal and alumina prices that was slightly offset by higher raw material costs. 

Hydro reports underlying EBITD of to NOK 2,284 million in comparison to NOK 1,829 million in the fourth quarter 2016. Underlying EBIT for Primary Metal increased in the first quarter due to higher realized all-in metal prices and higher volumes. This was partially offset by significantly higher alumina costs.

Underlying EBIT for Metal Markets declined in Q1 2017 due to lower results from sourcing and trading activities and negative currency effects.

Karmøy Technology Pilot project is running on time and budget and expected to start by Q4 2017.

"We are raising our expected 2017 global primary demand growth outlook from 3-5 percent to 4-6 percent, and we expect a largely balanced global market. Hydro is well positioned in this marketplace," says President and CEO, Svein Richard Brandtzæg.

"Demand for aluminium in lightweighting and sustainable solutions continues to grow, confirming our confidence in Hydro's integrated value chain, based on low-carbon aluminium production," Brandtzæg says.

Underlying EBIT for Rolled Products increased in Q1 compared with the Q4 2016. Seasonally higher sales volumes were partly offset by various operational issues like yearend maintenance and implementation of new equipment.

"We are opening our new 150,000 tonnes per year, state-of-the-art production line for automotive products in Germany on May 4, raising Hydro's total automotive capacity to 200,000 tonnes per year. Aluminium parts for the automotive industry will lightweight millions of new cars, helping the manufacturers to meet the lower emission targets and reducing global climate emissions," says Brandtzæg.

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Underlying EBIT for Sapa in Q1 2017 increased QoQ, in line with general seasonality in the industry.

Hydro's net cash position decreased during the first quarter by NOK 0.1 billion to NOK 5.9 billion at the end of the quarter. Reported EBIT amounted to NOK 2,410 million in the first quarter. Net income amounted to NOK 1,838 million in the Q1 2017 in comparison to NOK 1,008 million in Q4 2016.

Hydro is progressing well on its "Better" improvement program and expected to reach both the year-end target of NOK 500 million and the 2019 target NOK 2.9 billion.