Norsk Hydro : Sapa (joint venture) - Announcement of results for the fourth quarter 2015
February 11, 2016: 01:20 AM ET
OSLO, Norway, Feb. 11, 2016 (GLOBE NEWSWIRE) --
Compared to the previous quarter, underlying EBIT for Sapa declined mainly due to seasonally lower demand.
Underlying EBIT for Sapa increased compared to the same quarter of the previous year mainly due to the effects of the improvement programs, continued growth in North American demand and increased added value operations. Underlying EBIT for the fourth quarter was negatively affected by Sapa's measures to address, and consequences of, unsanctioned quality testing practices in North America.
The restructuring program initiated in 2013, targeting annual synergies of around NOK one billion by the end of 2016, reached its target in 2015, one year ahead of time. In addition to the factors mentioned above, reported EBIT for the fourth quarter was affected by charges related to restructuring activities, partly offset by unrealized gains from derivatives.
Underlying EBIT for 2015 improved compared with 2014 supported mainly by internal improvements and strong performance in the North American operation. Positive effects from a weakening Norwegian krone was offset by sharply falling metal premiums.
Net interest-bearing debt at the end of 2015 amounted to roughly NOK 1.8 billion, which is at the same level as when the Sapa joint venture was established on September 1, 2013.
Key Figures - Sapa (50%)
Fourth quarter 2015
Third quarter 2015
Fourth quarter 2014
Year 2015
Year 2014
NOK million, except sales volumes
Revenue*
6 410
6 948
5 921
27 626
23 105
Underlying EBITDA
245
367
171
1 364
958
Underlying EBIT
64
202
(27)
704
326
Underlying Net Income (loss)
70
120
(22)
454
199
Sales volumes (kmt)
156
171
161
682
699
Earnings before financial items and tax (EBIT)
44
87
(339)
264
(158)
*Historical revenues have been reclassified
Market
Demand for extruded products in North America decreased by 9 percent compared to the previous quarter, due to seasonality. Compared to the same quarter of the previous year demand increased 1 percent as a result of increased building and construction activity and strong automotive demand. For the full year, North American extrusion demand grew 5 percent over 2014.
In Europe, extruded products demand declined 7 percent compared with the previous quarter, due to seasonality. Demand was overall stable both for the full year and the quarter when compared to the previous year. A weak European building and construction market was offset by most other segments.
Demand for extruded products is expected to seasonally improve going into the first quarter of 2016.
Certain statements included within this announcement contain forward-looking information, including, without limitation, those relating to (a) forecasts, projections and estimates, (b) statements of management's plans, objectives and strategies for Hydro, such as planned expansions, investments 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, as well as (i) statements preceded by "expected", "scheduled", "targeted", "planned", "proposed", "intended" or similar statements.
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 aluminium business; 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 as a result of new information, future events or otherwise.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
