SINGAPORE Norsk Hydro ASAs earnings plunged in the second quarter compared with the first three months of this year due to lower prices for alumina and aluminum and seasonally lower production, the company said July 18.
Underlying earnings before interest and taxes (Ebit) totaled 518 million Norwegian kroner ($86.25 million), down 52 percent from 1.08 billion kroner in the first quarter and 2.4 percent below 531 million kroner in the second quarter of last year. Revenue of 16.05 billion kroner ($2.67 billion) was down 5 percent from a year earlier.
Underlying Ebit in the first half totaled 1.6 billion kroner ($266.39 million), up 45 percent from 1.1 billion kroner a year earlier, but Norsk Hydro said that disruptions to alumina production at the Alunorte refinery in Brazil as a result of external power outages are expected to have a negative impact on the companys second-half results.
Global economic uncertainty hit aluminum prices in the second quarter, the company said, but it expects aluminum demand outside China to grow between 2 and 4 percent this year.
"Although the global macroeconomic situation remains challenging, aluminum demand is expected to continue to show solid growth this year. Hydro maintains its outlook for balanced aluminum supply and demand in 2013," Hydro president and chief executive officer Svein Richard Brandtzæg said.
Oslo, Norway-based Hydro has sold around 50 percent of its expected primary aluminum production in the third quarterexcluding volumes from the Qatalum smelter in Qatarat around $1,850 per tonne.
The Alunorte alumina refinery and the Albras aluminum smelter have entered into U.S. currency forward contracts in Brazil for the second half of 2013 and 2014 amounting to $800 million, reducing Hydros net U.S. dollar/Brazilian real exposure.
Pending approval by the Chinese competition authorities, the planned Sapa joint venture between Hydro and Orkla ASA is expected to be completed in the third quarter.
A version of this article was first published by AMM sister publication Metal Bulletin.