Norsk Hydro’s 2016 annual report shows operational excellence despite drop in underlying EBIT

Norsk Hydro has published its annual report for 2016 with detailed information about Hydro's businesses, operational performance, financial performance, viability performance, corporate governance and financial statements.

Hydro reported revenue of NOK 81,953 million for the full year 2016, in comparison to NOK 87,694 in 2015. Underlying EBIT decreased to NOK 6,425 million compared with NOK 9,656 million in 2015 primarily due to a decrease in realized alumina prices and all-in metal prices.  For the full year 2016, reported earnings before financial items and tax amounted to NOK 7,011 million including net unrealized derivative gains and positive metal effects of NOK 553 million in total.

Sapa's performance continued to improve throughout the year, while Rolled Products delivered a weaker result driven by lower margins and higher costs.

Hydro made good progress on its "Better" improvement ambition targeting NOK 2.9 billion of annual improvements by 2019. For 2016, NOK 1.4 billion of annual improvements were delivered exceeding the 1.1 billion target.

Bauxite & Alumina generated total revenues of about NOK 20 billion in 2016. Bauxite production in Paragominas amounted to 11.1 million mt for the year and alumina production from Alunorte was 6.3 million mt for the year, both reaching record levels in 2016. Bauxite & Alumina sourced roughly 2.5 million mt of alumina in 2016.

Primary Metal generated about NOK 31 billion in total revenues in 2016. Production of electrolysis metal amounted to 2.1 million mt.  The company delivered 2.2 million mt of casthouse products to internal and external customers from the casthouses.

Metal Markets generated total revenues of around NOK 43 billion in 2016. The five remelters of Hydro in Europe and two in the U.S. produced approximately 550,000 mt of metal products in 2016. The company sold 2.9 million mt of metal products last year, including deliveries from the casthouses integrated with our primary smelters.

Rolled Products generated total revenues of approximately NOK 23 billion in 2016. Approximately 911,000 mt of rolled products were shipped from Hydro’s 5 European rolling mills.

{googleAdsense}

In his letter to shareholders, President and CEO Svein Richard Brandtzæg said, “By delivering NOK 1.4 billion in improvements in 2016, we surpassed our NOK 1.1 billion target. It encourages me to see that our people even know how to do 'Better' better. It also allows us to offer a safe and reliable dividend to shareholders."

"I am happy, not only about the results we achieve, but also by how we achieve them. By being a 360 degree aluminium company, fully integrated along the entire aluminium value-chain, Hydro is in a unique position to control every step of production, and be responsible ...” he insisted.

“In 2017 three important symbols of the new era will be in full operation; the Karmøy Technology Pilot in Norway, the Automotive Line 3 and the UBC recycling line in Germany, Brandtzæg added.