Norsk Hydro: Sapa (joint venture) - Announcement of results for the second quarter 2017

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| Source: Norsk Hydro Asa
multilang-release

Underlying EBIT for Sapa in the second quarter increased compared to the previous quarter, in line with general seasonality in the industry but also related to improved performance.

Sapa improved its underlying EBIT in the second quarter of 2017 compared to the same period last year, ending the quarter at NOK 914 million. The quarterly result is the best in Sapa's history. The increase was driven by a higher share of value-add business and internal improvements for all business areas.

Underlying EBIT for the first half of 2017 improved compared to the same period in 2016, influenced by the same factors as discussed above.

Net interest-bearing debt increased to NOK 3.1 billion at the end of the quarter, mainly reflecting dividend payments of NOK 3 billion to the owners.

Key Figures - Sapa (100%)  Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
NOK million, except sales volumes            
Volume (kmt) 349 366 340 310 355 359
Total operating revenues 13 905 14 071 13 140 12 210 14 323 15 309
Underlying EBITDA 901 1 132 812 653 1 100 1 252
Underlying EBIT 571 804 487 335 778 914
Underlying net income 365 540 315 334 562 658
Reported EBIT 655 920 497 350 856 781

Demand for extruded products in Europe and North America increased compared to the previous quarter by around 9 percent and 3 percent respectively, driven by seasonality.

In North America, total demand for extruded products increased by around 3 percent compared to the same quarter last year. The increase was driven by stronger automotive demand and higher building and construction activities whereas demand from commercial transportation was declining.

In Europe, total demand for extruded products increased by around 2 percent compared to the same quarter last year. Europe experienced stronger automotive and transportation demand, as well as an improved building and construction market.

Key figures per business area

Extrusion Europe Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
NOK million, except sales volumes       
Volume (kmt) 148 157 142 130 154 155
Operating revenues 5 366 5 468 4 932 4 565 5 553 5 999
Underlying EBITDA 349 425 276 221 390 416
Underlying EBIT 223 304 154 97 274 292
       
Extrusion North America Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
NOK million, except sales volumes       
Volume (kmt) 150 155 149 131 150 151
Operating revenues 5 265 5 234 5 183 4 617 5 514 5 753
Underlying EBITDA 414 362 361 199 437 466
Underlying EBIT 315 263 260 90 331 353
       
Building Systems Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
NOK million, except sales volumes       
Volume (kmt) 19 21 18 19 20 21
Operating revenues 1 869 1 939 1 680 1 685 1 830 2 044
Underlying EBITDA 110 210 104 109 155 219
Underlying EBIT 75 166 67 74 119 183
       
Precision Tubing Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
NOK million, except sales volumes       
Volume (kmt) 37 40 37 35 36 38
Operating revenues 1 620 1 664 1 549 1 543 1 651 1 734
Underlying EBITDA 144 169 135 161 180 193
Underlying EBIT 86 112 76 103 123 136
       
Other and eliminations Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017
Underlying EBITDA -116 -33 -64 -37 -63 -43
Underlying EBIT -128 -41 -69 -28 -69 -49

Investor contact
Contact Stian Hasle
Cellular +47 97736022
E-mail Stian.Hasle@hydro.com

Certain statements included in this announcement contain forward-looking information, including, without limitation, information relating to (a) forecasts, projections and estimates, (b) statements of Hydro management concerning plans, objectives and strategies, such as planned expansions, investments, divestments, curtailments or other projects, (c) targeted production volumes and costs, capacities or rates, start-up costs, cost reductions and profit objectives, (d) various expectations about future developments in Hydro's markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, and (i) qualified statements such as "expected", "scheduled", "targeted", "planned", "proposed", "intended" or similar.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include, but are not limited to: our continued ability to reposition and restructure our upstream and downstream businesses; changes in availability and cost of energy and raw materials; global supply and demand for aluminium and aluminium products; world economic growth, including rates of inflation and industrial production; changes in the relative value of currencies and the value of commodity contracts; trends in Hydro's key markets and competition; and legislative, regulatory and political factors.

No assurance can be given that such expectations will prove to have been correct.  Hydro disclaims any obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.


This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.