Norsk Hydro tops Q4 forecast after restructuring

Norwegian aluminium maker Norsk Hydro said restructuring paid off with final quarter core profit above forecast while lower prices and a weakening market did not dent its business as much as feared.

"We have taken swift measures to improve operations, and we are prepared for further corrective measures," the firm said on Thursday.

The results reflected weaker markets and a drop in demand for aluminium and aluminium products, especially in Europe, "where we clearly need to continue our restructuring efforts," Chief Executive Svein Richard Brandtzaeg said.

The firm took a 1.3-billion-crown writedown of assets in Australia where it is idling a 60,000 tonnes-per-year production line at its money-bleeding Kurri Kurri aluminium plant.

It reported underlying fourth-quarter earnings before interest and taxes (EBIT) of 1.13 billion Norwegian crowns ($195.56 million), up from the 588 million made in the same period last year, compared with the average forecast of 941 million in a Reuters poll of analysts.

Meanwhile, sales increased 12 percent to 21.7 billion crowns, 1.4 billion below analysts' mean forecast.

Hydro repeated it expected demand for aluminium to grow 3-5 percent in 2012 outside China "despite a weak macroeconomic situation and short-term challenges."

Aluminium prices ended last year near 18-month lows on concerns about economic weakness and oversupply, prompting some of the big alumiunium producers, including Hydro, to cut capacity.

LME aluminium prices have since steadied around $2,200 per tonne after falling below $2,000 in December, but inventories have risen and stocks in LME-registered warehouses are at a record level above 5.1 million tonnes MAL-STOCKS.

It proposed a dividend of 0.75 crowns per share, unchanged from last year and in line with analysts' median forecast. ($1 = 5.7784 Norwegian crowns)