Norsk Hydro puts up a 'stronger' performance in primary aluminium JVs for Q1 2016

Norsk Hydro has announced its financial results for the first quarter ended on March 31, 2016. The underlying earnings before financial items and tax of the Norway based energy and aluminium producer declined to NOK 1,501 million in the first quarter, down from NOK 1,566 million in the fourth quarter of 2015. The decline mainly reflected lower realized aluminium and alumina prices, partly offset by positive currency effects, lower raw material costs and seasonally stronger downstream results.

• Underlying EBIT of NOK 1 501 million for Q1
• Lower realized alumina and all-in aluminium prices
• BNOK 2.9 Better improvement ambition progressing according to plan
• 2016 global primary metal market largely balanced

Underlying EBIT for Bauxite & Alumina decreased compared to fourth quarter mainly due to lower realized alumina prices and lower sales volumes. The negative price development was partly offset by positive currency effects from a weaker Brazilian Real, lower fuel prices and lower depreciation following catch up effects on reassessment of useful life of certain assets in 2015. Production in Alunorte and Paragominas fell slightly after reaching record production levels in the fourth quarter of 2015.

Underlying EBIT for Primary Metal declined in the first quarter due to lower realized prices, higher fixed costs and additional cost related to ICMS tax on sales of surplus power in Brazil in the previous periods.

Underlying EBIT for Metal Markets increased somewhat in the first quarter mainly due to positive currency effects and improved results in remelters. This was partly offset by weaker results from sourcing and trading activities.

During the first quarter, Hydro progressed according to plan on its "Better" improvement ambition targeting NOK 2.9 billion of annual improvements by 2019.

Operating cash flow amounted to NOK 0.1 billion for the first quarter, including a working capital build up of NOK 1.8 billion. Net cash used for investment activities amounted to NOK 1.3 billion. Hydro's net cash position decreased during the first quarter by NOK 1.2 billion to NOK 3.9 billion at the end of the quarter.

Reported earnings before financial items and tax amounted to NOK 1,693 million, and Net income amounted to NOK 2,382 million in the first quarter of the current financial year.

"I am happy to see our 2.9 billion Better ambition launched last year is progressing according to plan, contributing to our first-quartile position on the global cost curves. This is underpinned by continued high production in Bauxite & Alumina, as well as stronger performance in our primary aluminium joint ventures," says President and CEO Svein Richard Brandtzæg.