Norsk Hydro Q2 2017 results up on higher aluminium prices, Sapa continues positive performance

Norsk Hydro reports positive 2nd quarter 2017 results driven by higher realized all-in metal and favourable currency developments that was slightly offset by higher raw material costs and lower realized alumina prices. Hydro reports underlying EBITD of to NOK 2,930 million in comparison to NOK 2,284 million in the 1st quarter 2017.

Commenting on the results, Hydro President & CEO, Svein Richard Brandtzæg says:  

"Higher aluminium prices in the quarter are lifting results, and I am pleased to see Sapa delivering record results, continuing the strong trend."

"Hydro will confirm its position as the world's leading integrated aluminium company with the agreement to acquire Orkla's 50 percent interest in world-leading extrusion company Sapa. The transaction reinforces our strategic direction to become better, bigger and greener, with a solid asset base, unique competencies and capabilities along the full value chain," adds Brandtzæg.

Underlying EBIT for Primary Metal increased in Q2 driven by higher realized all-in metal prices, partially offset by higher raw material prices. Underlying EBIT for Metal Markets improved significantly as a result of positive inventory valuation and currency effects and trading activities. Results from remelters also improved in Q2 driven by increased sales and margins.  

Hydro currently sees a deficit in global primary market caused by increasing deficit outside China. The company projects a 4-6 per cent annual aluminium demand growth for 2017 and a balanced aluminium market.

Underlying EBIT for Rolled Products dropped sequentially primarily due to reduced average margins driven by product mix, and operational issues. The Neuss aluminium plant benefited from the all-in metal price and lower alumina cost.

The record quarterly result from Sapa contributed to the positive result. The acquisition of the 100% shares of Sapa is expected to close by the second half of 2017.  

Hydro is progressing well on its "Better" improvement program and expected to reach the year-end target of NOK 500 million. Karmøy Technology Pilot project is running on time and budget and expected to start by Q4 2017.  

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Hydro's net cash position increased to NOK 6.0 billion at the end of the quarter. Net cash provided by operating activities amounted to NOK 4.3 billion.