Norwegian aluminium smelter Norsk Hydro ASA released third-quarter results yesterday. The firm’s quarterly numbers surpass forecasts largely due to rising metal prices and despite continuing curtailments at the Alunorte alumina refinery.
Hydro’s overall revenue for the quarter totaled NOK39,766 million, up by 74 percent on the year. Earnings before financial items and tax (EBIT) came to NOK620 million, off by 31 percent from the second quarter. However, Underlying EBIT totaled NOK2,676 million, a 9-percent gain on the prior quarter.
The Bauxite & Alumina segment turned in an underlying EBIT of NOK685 million, up 66 percent on the year and 88 percent over the second quarter. Primary Metal’s underlying EBIT totaled NOK861 million, off by 34 percent on the year, but up by 14 percent over the prior quarter. Extruded Solutions showed an underlying EBIT of NOK497 million, off by 48 percent from the second quarter. Rolled Products showed an underlying EBIT of NOK82 million, down by 13 percent on the year and 61 percent from the prior quarter.
Overall, Hydro reported earnings before financial items, tax, depreciation and amortization (EBITDA) of NOK4,510 million, up by 3 percent on the year, but off by 20 percent over last quarter. Underlying EBITDA totaled NOK4,510 million, good for a 16-percent bump on the year. Net income figured at NOK925 million, down by 58 percent on the year and 55 percent over the second quarter. Underlying net income was NOK1,696 million, down by 5 percent from last year and 19 percent from the prior quarter.
President and CEO Svein Richard Brandtzæg summarized the quarter’s results by noting the firm’s ongoing struggles with rising costs and operations at its Brazilian alumina refinery.
“The third quarter reflected our continued challenges at Alunorte and increased raw material costs, while higher aluminium and alumina prices, as well as strong Energy results, contributed positively. The market for aluminium is tightening, and we expect the 2018 global primary market in deficit.”
“Signing the technical and social agreements in Brazil in September was a step in the right direction towards normalized production,” he concluded. “We continue the dialogue with the authorities with the aim to resume full production at Alunorte, but the timing remains uncertain.”