Hydro had underlying earnings before financial items and tax of NOK 588 million in the Q4 down from NOK 965 million in the Q3. Lower realized aluminium prices, higher operating costs and seasonally lower sales volumes weakened underlying results.
1. Underlying EBIT NOK 588 million
2. Upstream decline on lower realized aluminum prices, partly offset by Qatalum insurance proceeds
3. Mid and downstream down on higher costs and seasonally lower sales, margins remain firm
4. Energy up on high prices and high production
5. Primary aluminum demand expected to grow 7% in Hydro's main markets in 2011
6. Qatalum aluminum plant ramp up expected to reach full output from June 2011
7. Closing of Vale deal most likely in Q1 2011
8. Proposed 2010 dividend NOK 0.75 per share.
Underlying results for Primary Metal declined during the quarter mainly due to lower realized aluminium prices, partly offset by insurance proceeds relating to the August 2010 power outage at Qatalum, the joint venture between Qatar Petroleum and Hydro. Alumina and Raw Materials' underlying results were stable, supported by firm earnings for alumina commercial activities.
Operating losses for Qatalum increased in the Q4 as expected. Ramp up of the plant restarted in the middle of September. At the end of the fourth quarter, 321 out of 704 cells were fully operational. Final ramp up to full production capacity will be hampered by delayed commissioning of the power plant steam turbines. Qatalum is expected to reach full production from June 2011.
Hydro's mid and downstream operations delivered lower underlying EBIT compared to the third quarter mainly due to higher operating costs including costs for planned maintenance activities and seasonally lower sales volumes. Margins remained firm. Underlying EBIT for Energy increased substantially compared to the previous quarter, due to higher spot prices and significantly higher power production levels.
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