Norsk Hydro Q4 and full year 2017 results up on higher aluminium and alumina prices

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

Hydro's underlying EBIT increased from NOK 2,446 million in Q3 2017 to NOK 3,555 million in Q4 2017, mostly driven by higher realized alumina and aluminium prices. For the full year 2017 Hydro's underlying EBIT increased to NOK 11,215 million from NOK 6,425 million for 2016, again driven by higher all-in metal price and alumina sales price.

"2017 marks the start of new chapter in Hydro's history. With the Sapa acquisition, Hydro is now the world's leading integrated aluminium company, with 35,000 employees in 40 countries serving 30,000 customers globally. I am pleased with the strong, full-year and quarterly results, supported by higher aluminium and alumina prices. I am also pleased to see the Better improvement program on track to reach the increased 2019 target of NOK 3.0 billion," says President and CEO Svein Richard Brandtzæg.

Underlying EBIT for Primary Metal improved in the fourth quarter due to higher realized aluminium prices, partly offset by higher raw material prices and fixed costs. Underlying EBIT for Metal Markets improved in the fourth quarter, mainly due to higher results from sourcing and trading activities. Karmøy Technology Pilot producing first metal is ramping up during first half 2018 for full operations.

Underlying EBIT for Rolled products in Q4 2017 remained flat. Increasing margins were offset by seasonal reduction in sales volumes and year end maintenance costs. The Neuss smelter result decreased in Q4 2017 due to increasing alumina and raw material prices.

The new Extruded Solutions business area was formed at the beginning of the fourth quarter after Hydro's acquisition of the remaining 50 per cent of Sapa shares. Underlying EBIT for Extruded Solutions decreased compared to Q3 2017 primarily due to seasonally lower volumes, partly offset by increased margins. The business areas' financial results are fully consolidated from the closing date October 2, 2017.

Due to slow performance in Rolled Products division and slower than expected progress of improvements at Albras in Primary Metal, progress on Hydro's "Better" improvement program is behind plan.

Hydro's net cash position decreased from NOK 7.7 billion to a net debt position of NOK 4.1 billion at the end of the quarter. Reported EBIT amounted to NOK 4,511 million for Q4 2017 in comparison to NOK 2,323 million in Q3 2017. For the full year 2017, reported EBIT amounted to NOK 12,189 million in comparison to NOK 7,011 million in 2016.

Net income amounted to NOK 3,600 million in the fourth quarter 2017 in comparison to the net income of NOK 2,184 million in Q3 2017. Net income for 2017 amounted to NOK 9,184 million. For the previous year net income amounted to NOK 6,586 million.

Brandtzæg projects a balanced market outlook for primary aluminium in 2018, and a 2018 global demand growth outlook of 4-5%, driven by solid demand for aluminium from automotive and construction markets.