Sapa (Norsk Hydro joint venture) reports improved earning in Q2 2016 sequentially and YoY

Sapa (Norsk Hydro joint venture) has announced the results for the second quarter of 2016. Higher demand for Sapa products and stronger margins during the quarter accounted for a rise in Underlying EBIT in comparison to the first quarter of 2016.

Sapa also reported an increase in underlying EBIT YoY. Increased share of value added products, positive market development due to rising demand and various improvement programs improved earnings across all business segments. This is a positive development from the last year’s second quarter which reported a negative growth due to the sharp fall in North America’s metal premiums.

Talking about the overall performance of the first half, underlying EBIT improved compared to the first half of 2015. This result was also influenced by the above mentioned factors.

Sapa also reported an increase in extruded products demands in Europe and North America in comparison to the 1st quarter by 4.5 per cent and 3 per cent, respectively, driven by seasonal positive developments.

Overall market demand increased compared to the 2nd quarter 2015. In North America, development in building and construction sector and automotive demand contributed positively towards market demand. Europe market was mostly influence by growth in transportation and automotive sector though building and construction sector registered a mixed response. Market demand in in North America and Europe increased by 2.5 per cent and 1.5 per cent respectively.

Sapa expects a stable moderate market growth in Europe, while indicates the possibility of a flat market in certain segments of North America. Growing aluminium application in the automotive sector will be contributing positively towards demand. Considering the seasonally strong performance in the second quarter demand is expected to drop slightly in the third quarter.