Norsk Hydro announced Q4 2018 result

　　Underlying EBIT of NOK 534 million

　　Alunorte, Paragominas and Albras producing at 50%

　　Significantly increased raw material costs

　　Downstream results down on margin and volume

　　Strong Energy result on high prices

　　Better improvement program hit by the Alunorte situation – 2018 target not met, will not reach 2019 target

　　Proposed dividend for 2018 of NOK 1.25 per share

　　2019 global primary market expected in deficit, continued macro uncertainty

　　Mr Svein Richard Brandtz?g President and CEO said that “Our results are reflecting the challenging situation we face in Brazil and higher raw material costs, adding that the Alunorte alumina refinery has made progress towards resuming normal production, but that the timing remains uncertain.”

　　Mr Brandtzæg said that “Even though 2018 has been a challenging year for Hydro, we have also taken several significant steps to strengthen our future competitiveness, including the integration of the Extruded Solutions business area, reaching full production at the Karmæy technology pilot, securing our future power sourcing needs in Norway and improving the performance at our new automotive line in Germany.”

　　He said that “For 2019, we expect the global primary aluminium market to be in deficit, although increasing macro uncertainty could lead to softening demand growth.”

　　Underlying EBIT for Bauxite & Alumina decreased significantly compared to the fourth quarter of last year, from NOK 1 872 million in 2017 to NOK 493 million in 2018. The results were driven by the effects of reduced production at both Alunorte and Paragominas and higher raw material prices, partly offset by higher realized alumina sales prices and positive currency effects.

　　Underlying EBIT for Primary Metal declined from NOK 1 377 million in the fourth quarter 2017 to a loss of NOK 677 million in the same period of 2018, mainly due to higher alumina and carbon costs, as well as lower sales volumes.

　　Fourth-quarter underlying EBIT for Metal Markets improved from NOK 185 million in 2017 to NOK 275 million in 2018, mainly due to increased results from the remelters and positive contributions from currency and inventory valuation effects, partly offset by lower results within sourcing and trading activities.

　　Underlying EBIT for Rolled Products decreased significantly compared to the fourth quarter of 2017, from NOK 95 million in 2017 to a loss of NOK 113 million in 2018. Improved performance from Automotive line 3 and positive currency effects were more than offset by lower sales volumes and margins in addition to increased personnel, energy and maintenance costs. Results for the Neuss smelter decreased, as the positive effects of the new power contract were more than offset by increasing raw material prices and lower positive inventory effects.

　　Underlying EBIT for Extruded Solutions decreased from NOK 284 million in the fourth quarter 2017 to NOK 202 million in 2018. The positive effect of higher margins was offset by increased production costs in connection with the ramp-up of new product lines in Europe and negative effects from a lower Midwest Premium and section 232 tariffs in North America. Additional costs due to the integration and restructuring of the two recently acquired extrusion plants in Brazil also had a negative effect on the quarter.

　　Underlying EBIT for Energy increased from NOK 457 million in the fourth quarter 2017 to NOK 500 million in the fourth quarter 2018. The increase was mainly due to significantly higher prices, partly offset by lower production and negative effects from the repricing of an internal power contract with the Neuss smelter.

　　Hydro’s underlying EBIT for 2018 was NOK 9 069 million, down from NOK 11 215 million in 2017. The weaker results reflect negative effects relating to the production curtailment at Alunorte and increased raw material costs, partly offset by a higher all-in metal price and alumina sales price as well as the positive contribution from the full consolidation of Extruded Solutions. The 2018 results were positively impacted by strong Energy results and improved downstream margins and volumes.

　　Mainly due to the situation in Brazil, Hydro's "Better" improvement program did not reach the 2018 target of NOK 500 million. For the same reason, Hydro will not be able to meet its “Better” target for 2019.