DJ Norsk Hydro Swings to Net Profit on Year
Feb 12, 2013 (Dow Jones Commodities News via Comtex) --
By Kjetil Malkenes Hovland
OSLO--Norwegian aluminum producer Norsk Hydro ASA (NHY.OS) said Tuesday that although lower prices weighed on its fourth-quarter earnings compared to the year-ago period, it swung to a net profit.
MAIN FACTS:
-The company's net profit was NOK144 million in the fourth quarter, compared with a net loss of NOK739 million in the same period last year. A FactSet survey of 10 analysts had expected a net profit of NOK133.5 million.
-The company said it produced less aluminum and alumina at lower prices on the year in the fourth quarter. The year-ago profit was hit by a NOK1.3 billion write-down of the Australian Kurri Kurri plant and Norsk Hydro's operations in Southern Europe.
-Norsk Hydro's Board of Directors proposed a dividend of NOK 0.75 per share for 2012.
-The closely-watched underlying earnings before interest and taxes was NOK138 million in the fourth quarter from NOK1.13 billion a year earlier, while analysts had expected NOK299.7 million.
-Fourth-quarter revenues were NOK15.59 billion, compared with NOK21.75 billion a year earlier. Analysts expected revenue of NOK16.74 billion.
-The global demand for primary aluminum in the fourth quarter was seasonally lower compared to the previous quarter, while supply increased.
-Aluminum stocks are still huge, at 5.2 million tons at the end of the quarter, a lot of it owned by large financial investors.
-The Bauxite and Alumina segment was hit by lower LME-linked alumina prices and somewhat lower volumes on the year.
-Primary Metal division earnings declined on significantly lower prices and lower volumes on the year, due among other things to the shutdown of production capacity at the Kurri Kurri plant in Australia and at Ardal, Norway.
-The company produced less energy on the year in the fourth quarter, but at higher prices. Compared to the year-earlier period, underlying ebit for energy declined both in 4Q and full-year 2012.
-Norsk Hydro has sold forward around 60% of its expected primary aluminum production for the first quarter of 2013 at a price level of around 2,050 a ton, excluding volumes from the Qatalum plant. The company got 2,439 a ton in 4Q 2011 and 1,940 a ton for its production in 4Q 2012.
-The full-year 2012 underlying ebit fell considerably to NOK1.16 billion from NOK5.99 billion a year earlier, due to lower aluminum and alumina prices, partly offset by the effects of the company's cost-cutting program.
-"On the back of continuing challenging markets, our focus remains on improving performance across our value chain," said Chief Executive Svein-Richard Brandtzaeg in a statement. "The ambitious 300 [a ton] program is expected to be completed at the end of 2013."
-Norsk Hydro shares closed Monday at NOK26.70, valuing the company at NOK55.2 billion.
-Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@dowjones.com
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(END) Dow Jones Newswires
02-12-13 0155ET
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