Norsk Hydro Posts Loss After Lower Aluminum Prices, Production

 

 

The net loss was 739 million kroner ($127.3 million) compared with net income of 745 million kroner a year earlier, the Oslo-based company said in a statement today. Sales declined 3.7 percent to 21.7 billion kroner. It declared a dividend of 0.75 kroner a share on 2011 earnings.

 

 

Hydro, which last month curtailed one-third of its output at the Kurri Kurri smelter in Australia because of a slump in aluminum prices, took a charge of 1 billion kroner for the move, the statement shows. Hydro’s systems business in Spain, Portugal and Italy had write downs of about 230 million kroner.

 

 

“We maintain our expectation of 3 percent to 5 percent growth in aluminium demand for 2012 outside China despite a weak macro-economic situation and short-term challenges,” Chief Executive Officer Svein Richard Brandtzaeg said. “However, the long-term fundamentals for the aluminium industry remain positive.”

 

 

The company sold 85 percent of its estimated aluminum production in the first quarter at about $2,150 a metric ton, Hydro said.

 

 

Hydro’s 2011 net income rose to 2.44 billion kroner from 2.22 billion kroner a year earlier, it said in the statement. The company, competing in Europe with United Co. Rusal (486) and Rio Tinto Alcan Inc. (AL), said it reduced operating expenses by 1 billion kroner in 2011 from 2009 cost levels.

 

 

London Prices

 

 

Average prices for aluminum for three-month delivery on the London Stock Exchange dropped 11 percent to $2,115 a ton in the quarter from a year earlier.

 

 

“A further decline in demand is expected in the European extrusion and building systems markets in the first quarter of 2012, driven by the weak economic developments, especially in Southern Europe,” Brandtzaeg said. “Automotive production in Europe is expected to decline in the first quarter due to reduced demand for cars in Europe, while outlook is more positive in North America and China.”