Results fall on write-downs, weak markets

Wednesday, 18. February 2009 07:30
Hydro's underlying EBIT was NOK 868 million in the fourth quarter,
including inventory write-downs of about NOK 700 million. Underlying
EBIT amounted to NOK 1,490 million in the third quarter and 1,699
million in the fourth quarter of 2007. Hydro's results for the
quarter reflect the ongoing financial crisis, which has led to a
dramatic drop in aluminium prices as a result of a sharp fall in
global demand.

Underlying EBIT for the full-year 2008 fell to NOK 6,009 million from
the solid result of NOK 10,153 million in 2007, as higher raw
material costs affecting the entire industry had a substantial impact
on Hydro's results in addition to the economic downturn in the fourth
quarter.

"Hydro has acted quickly and decisively in response to the
unprecedented drop in aluminium markets toward the end of last year,"
President and CEO Eivind Reiten said. "We have a very demanding year
ahead of us, and we will continue to take proactive measures to meet
the unprecedented market conditions," he said.

"Improving Hydro's competitive position will be our key focus in
2009," Reiten said. "Progressing Qatalum according to plan will be a
top priority, moving Hydro's smelter system down the industry cost
curve and ensuring that we emerge as a stronger company when markets
normalize."

Hydro has made wide-ranging adjustments in response to the severe
drop in aluminium markets, and has announced reductions in its
primary aluminium production of 23 percent, representing about
400,000 tonnes per year of high-cost production capacity, which will
improve the average cost of Hydro's smelter system. Approximately
140,000 tonnes of the total will be shut down by the end of the first
quarter of 2009, with the remainder to be shut down by the end of the
second quarter of 2009.

Production of remelted metal at Hydro's casthouses has been cut by 45
percent, or around 500,000 tonnes per year, and alumina production at
the part-owned Alpart refinery in Jamaica has been reduced by 50
percent. Hydro has also taken out significant capacity in its
downstream operations through shift-reductions and implemented
cost-cutting measures throughout the company.

Due to demanding markets and low forward visibility in both the
aluminium and financial markets, Hydro's Board of Directors proposes
to forgo a dividend payment for 2008. With Hydro's substantial
investment program resulting from the Qatalum project and the high
cost of raising capital in financial markets, the Board regards it as
prudent to conserve the company's cash resources to reduce funding
requirements.

Underlying EBIT for Aluminium Metal declined significantly from both
the previous quarter and the fourth quarter of 2007. Results were
impacted by inventory write-downs of about NOK 700 million relating
to primary aluminium and remelting operations following the historic
fall in aluminium prices during the quarter. Underlying results were
positively affected by higher realized prices measured in Norwegian
kroner, due to the strengthening of the US dollar during the quarter.

Underlying results for bauxite and alumina operations improved from
the third quarter despite sharply lower realized alumina prices in US
dollars. Production increased at the part-owned Alunorte refinery
following start-up of the expansion in the third quarter and the
plant operated at close to full capacity throughout the fourth
quarter. Energy costs for Alunorte declined due to a significant drop
in oil prices and improved energy mix.

Hydro's joint venture with Qatar Petroleum on the 585,000-tonne
Qatalum smelter, in which Hydro owns 50 percent, was about 60 percent
complete by the end of the year, on schedule and within budget frame
for start-up around year-end 2009 and ramp-up to full production
during 2010. Once on stream, Qatalum will be one of the most
cost-efficient smelters in the world.

Aluminium Products incurred an underlying loss for the quarter, down
significantly from both the third quarter of 2008 and the fourth
quarter 2007, as results were hit by a sharp drop in demand. Volumes
were relatively stable for the building systems business, and overall
extrusion margins remained at a satisfactory level despite the
significant market decline. Underlying results for US operations
remained at depressed levels. Automotive incurred substantial losses
compared to both the third quarter of 2008 and fourth quarter of the
previous year.

Energy delivered record underlying results both for the quarter and
the year, mainly due to high power production and continued strong
spot prices. Hydro's solar operations recorded an underlying loss in
the quarter.

Net cash provided by operating activities was NOK 2.9 billion for
2008, down from NOK 14.3 billion in 2007. Hydro had a net cash
position amounting to NOK 3.5 billion at the end of 2008.


Key financial
information
% %
NOK million, Fourth Third change Fourth change Year Year
except per share quarter quarter prior quarter prior 2008 2007
data 2008 2008 quarter 2007 year
quarter

Revenue 21,368 21,765 (2) % 21,651 (1) % 88,643 94,316

Earnings before
financial items (3,106) 2,414 >(100)% 338 >(100)% 1,194 9,025
and tax (EBIT)
Items excluded
from underlying 3,975 (924) 1,361 4,815 1,128
EBIT
Underlying
earnings before 868 1,490 (42) % 1,699 (49) % 6,009 10,153
financial items
and tax (EBIT)

Underlying
earnings before
financial items
and tax (EBIT) :
Aluminium Metal 435 932 (53) % 1,333 (67) % 3,575 8,265
Aluminium (239) 322 >(100)% 74 >(100)% 988 1,352
Products
Energy 592 475 25 % 341 73 % 1,736 1,184
Corporate, other 81 (239) >100% (50) >100% (290) (647)
and eliminations
Underlying
earnings before 868 1,490 (42) % 1,699 (49) % 6,009 10,153
financial items
and tax (EBIT)

Income (loss)
from continuing (5,845) 233 >(100)% 527 >(100)% (3,267) 9,158
operations

Underlying
income (loss) (184) 1,075 >(100)% 1,411 >(100)% 3,579 8,057
from continuing
operations

Earnings per
share from (4.99) 0.06 >(100)% 0.36 >(100)% (3.04) 7.17
continuing
operations

Underlying
earnings per
share from (0.29) 0.75 >(100)% 1.09 >(100)% 2.62 6.26
continuing
operations

Financial data:
Investments 2,749 2,443 13 % 2,173 26 % 9,012 5,206
Adjusted net
interest-bearing (15,440) (5,491) >(100)% (842) >(100)% (15,440) (842)
debt


Operating
statistics
Realized
aluminium price 2,654 2,848 (7) % 2,485 7 % 2,638 2,561
LME (USD/mt)
Realized
aluminium price 16,904 15,114 12 % 14,138 20 % 14,724 15,521
LME (NOK/mt)
Primary
aluminium 442 439 1 % 439 1 % 1,750 1,742
production (kmt)
Rolled Products
sales volumes to 213 240 (11) % 246 (13) % 965 1,030
external market
(kmt)
Extrusion sales
volumes to 103 122 (15) % 117 (12) % 488 508
external market
(kmt)
Automotive sales
volumes to 18 26 (32) % 29 (39) % 105 117
external market
(kmt)
Power production 2,813 2,677 5 % 2,321 21 % 11,361 11,018
(GWh)


Reported EBIT and income from continuing operations
Reported EBIT for Hydro amounted to a loss of NOK 3,106 million for
the quarter including charges of roughly NOK 2.5 billion, comprised
of impairment losses of NOK 2,150 million due to the deteriorating
market conditions and high input costs, and write-downs of roughly
NOK 300 million relating to our minority interests in solar
businesses. Reported EBIT for the quarter also included substantial
net unrealized losses on LME derivative contracts of about NOK 2.0
billion, net unrealized gains on power contracts of about NOK 1.5
billion and other net negative effects of roughly NOK 1 billion.
Reported EBIT for the third quarter of NOK 2,414 million was impacted
by significant net unrealized gains on power contracts of about NOK 1
billion.

Reported Income from continuing operations amounted to a loss of NOK
5,845 million in the fourth quarter including net foreign exchange
losses of NOK 4.6 billion. Approximately half of the losses related
mainly to Hydro's US dollar hedging program. The remainder related to
losses on intercompany balances denominated in Euro. The Euro losses
have no cash effect and are offset in equity by translation of the
corresponding subsidiaries during consolidation. During the quarter,
both the US dollar and Euro have strengthened against the Norwegian
kroner by about 18 percent. Reported Income from continuing
operations amounted to NOK 233 million in the third quarter including
net unrealized and realized foreign exchange losses of NOK 2,015
million.

Market developments and outlook
The severe downturn in the global economy has led to a sharp decline
in demand for aluminium and rapidly increasing stocks. The LME three
month price for aluminium continued its sharp decline in fourth
quarter falling from USD 2,446 per mt at the end of September to a
low of USD 1,464 per mt in December before closing the year at USD
1,497 per mt. By year-end prices reached a level that is lower than
the cash-costs of a substantial portion of global smelter production.
The decline from the high price levels experienced in the beginning
of the third quarter of 2008 was of a magnitude which is
unprecedented in the history of the aluminium industry. In response,
announced smelter curtailments reached a global level of around 1.5
million mt per year excluding China as of the end of 2008, and have
increased further to around 3.2 million mt.

The market for metal products (extrusion ingot, sheet ingot, foundry
alloys and wire rod) in Europe and North America weakened
dramatically during the fourth quarter of 2008. The automotive
markets collapsed leading to a sharp decrease in demand, mainly for
foundry alloys but also for the other metal products. In addition,
the building and construction markets in US and Europe deteriorated
significantly leading to reduced demand.

Outlook for Hydro
Hydro has taken decisive proactive measures responding to the extreme
market developments by closing or idling substantial production
capacity. In order to secure our on-going operations, we are
reviewing our global network of primary aluminium plants closing,
idling or curtailing production in high cost units. We have
identified additional areas both upstream and downstream for
potential measures to reduce costs and preserve cash and we are in
process of reviewing the size and structure of our administrative
staff functions. Company-wide initiatives to capitalize on falling
commodity prices have been implemented. Together these initiatives
are expected to result in significant cost reductions in 2009.

At the end of 2008, Hydro had sold 85 percent of its metal production
for the first quarter of 2009 forward for an average price of USD
1,872 per mt. Production of primary metal is expected to be about 10
percent lower in the first quarter as a result of the curtailments
described above. Despite the curtailments and cost reduction
initiatives described above, Hydro expects significantly lower
earnings for its Aluminium metal operations in the first half of
2009.

Our business activities expose us to the risk that one or more
counterparties may default on their obligations, resulting in direct
financial loss, an unexpected increase in market exposure or higher
operating costs. Weak and deteriorating economic conditions on a
global, regional or industry sector level, combined with challenging
financial markets, increase the risk of defaulting counterparties. So
far we have not experienced any significant defaults and are
carefully monitoring the situation.

Hydro is currently investing heavily in organic growth with its 50
percent interest in the Qatalum smelter representing the single, most
important development. Approximately fifty percent of the estimated
USD 5.6 billion cost of the plant is funded by project financing on
favorable terms. An existing USD 1.7 billion multi-currency stand-by
credit facility is also fully available. Due to our present high
investment level and expected lower level of cash generated from
operations, Hydro is in the process of raising additional financing
to meet future capital requirements. In order to secure our financial
position, capital expenditures (excluding Qatalum) have been reduced
by roughly 40 percent from the 2008 expenditures of NOK 6 billion
through postponement of non-critical projects.

Aluminium Metal
Underlying EBIT for Aluminium Metal declined significantly from both
the third quarter of 2008 and fourth quarter of 2007. Results for the
quarter were impacted by inventory write-downs of roughly NOK 700
million mainly due to the substantial decline in aluminium prices
towards the end of the year. Realized prices measured in Norwegian
kroner increased in the quarter having a positive effect on
underlying results. The price increase reflected the significant
strengthening of the US dollar during the quarter.

Underlying results for our Bauxite and Alumina operations improved
from the third quarter of 2008 and fourth quarter 2007 despite
sharply lower realized alumina prices in USD due to the decline in
LME prices. Production increased and energy costs declined due to a
significant drop in power prices and improved energy mix. Underlying
results from Alpart declined due to the drop in the realized alumina
prices.

Despite the increase in realized aluminium prices, underlying EBIT
for our Primary Aluminium operations declined compared to both the
third quarter of 2008 and fourth quarter of 2007 impacted by cost
increases and the inventory write-downs discussed above. Volumes from
our casthouses declined due to the increasingly difficult markets for
our products. Our Commercial activities delivered an underlying loss
in the quarter impacted by inventory write-downs and the significant
market decline.

Underlying EBIT for the year 2008 declined significantly, impacted by
lower realized prices and substantial increases in the cost of power
and fossil fuels, freight, caustic, alloying materials and carbon in
addition to the effect of the inventory write-downs discussed above.
Prices measured in Norwegian kroner declined, having a negative
impact on underlying results.

Outlook
Since the end of the year, prices have reached the lowest level in
more than five years of USD 1,316 per mt. Aluminium prices are
expected to remain low in the medium-term, but there is limited
forward visibility and significant uncertainty regarding
developments.

The significant drop in demand for aluminium has resulted in
declining demand for raw materials and smelter input costs are
falling. The cost of alumina is normally linked to aluminium prices
and therefore price adjustments are relatively quick. Significant
curtailments in alumina production have also been announced as a
result of planned smelter shutdowns, in particular in China. Prices
for other important raw materials are also declining but with a
somewhat longer time lag to the decline in aluminium prices. However,
there are indications that energy prices in Europe and the US,
although trending downwards, will remain elevated.

Demand within main aluminium market segments is expected to remain
depressed, a situation that could continue throughout the entire
year. There is substantial uncertainty regarding the timing of a
recovery.

Global primary aluminium consumption excluding China could
potentially decline by up to 10 to 15 percent in 2009 from a
consumption level of 25 million mt in 2008. Chinese consumption of
primary aluminium may fall slightly from the 2008 level of 12.5
million mt.

Outlook for Hydro
Hydro has taken decisive, proactive measures in response to the
extreme market developments beginning with the reduction of metal
products based on remelted metal at our primary based casthouses and
cutting production at our stand-alone remelters. This was quickly
followed by decisions to close or idle primary capacity, focusing on
the operations in our portfolio with the highest costs. A decision
was taken for the early closure of the Søderberg line at our Karmøy
plant, which was due to be shut-down at the end of 2009. This
facility, which has an annual capacity of about 120,000 mt, will be
closed by the end of the first quarter of 2009. We also decided,
together with our partner Rio Tinto Alcan, to reduce primary
production at the Søral aluminium smelter in Norway by around 50
percent (Hydro's share about 44,000 mt per year). Electrolysis
production at our Neuss smelter in Germany, which has a total annual
capacity of about 230.000 mt will be temporarily shut down.
Production cost at Neuss is significantly higher than our average
smelter costs due to high power prices in Germany. Casthouse
operations at Neuss will continue. In total, curtailment measures
taken will lead to reductions of approximately 400,000 mt per year of
higher cost capacity further improving the average cost of our
smelter system.

In January 2009, a decision was taken by the partners of Alpart, an
alumina refinery in Jamaica, to reduce production by 50 percent
corresponding to approx 290,000 mt per year of alumina for Hydro's
share (35 percent). The reduction in supply corresponds to about
150,000 mt of primary aluminium. Further measures are under
evaluation.

Hydro is taking initiatives towards its suppliers to capitalize on
falling commodity prices which will lead to input cost reductions at
Hydro's smelters during the first half of 2009. Alumina prices which
are linked to LME prices will be reduced as will other important raw
material prices such as petroleum coke where a significant decline in
price has already occurred.

At the end of 2008, Hydro had sold 85 percent of its metal production
for the first quarter of 2009 forward for an average price of USD
1,872 per mt. Production of primary metal is expected to be about 10
percent lower in the first quarter as a result of the curtailments
described above. Despite the curtailments and cost reduction
initiatives described above, Hydro expects significantly lower
earnings for its Aluminium metal operations in the first half of
2009.

Aluminium Products
Our Aluminium Products business incurred an underlying loss of NOK
239 million for the quarter, down significantly from both the third
quarter of 2008 and fourth quarter of the previous year. Results were
heavily impacted by a sharp drop in demand resulting from the
deepening financial and economic crisis.

Underlying results for our Rolled Products business were
significantly impacted by the negative economic developments in
addition to seasonally lower demand. Our Extrusion business delivered
an underlying loss in the quarter due to a sharp drop in volumes
beyond the normal seasonal decline. Volumes were relatively stable
for our Building Systems business, however, and overall margins
remained at a good level despite the significant market decline.
Underlying results for our US operations remained at depressed
levels, however, results for our South American operations continued
to be strong. Our Automotive operations incurred substantial losses
compared to both the third quarter of 2008 and fourth quarter of the
previous year due a sharp decline in volume.

Underlying EBIT declined for our Aluminium Products business for 2008
as a whole compared to 2007. Our Rolled Products business delivered
improved underlying results with positive margin developments
offsetting volume declines. Our European extruders outperformed a
general market decline for the first nine months of 2008, but
underlying results declined for the year heavily impacted by market
decline in the final quarter. Underlying results for our US
operations also improved from 2007 during the first nine months,
driven by significant cost reductions, but the market turbulence in
the final quarter of 2008 more than offset the positive developments.
Underlying results for our South American operations improved for the
year compared to 2007. Significantly lower volumes also impacted
underlying results for 2008 for our Automotive operations compared to
the previous year. In addition, our Automotive business incurred
costs related to start-up of new product lines as well as costs for
reducing capacity to meet current market conditions.

Outlook
Market demand for flat rolled products in Europe is expected to
continue declining during the coming months, driven by lower demand
from most markets and in particular the automotive and engineering
market segments. The stronger US dollar is expected to reduce
pressure on margins from potential US exports to Europe. However, we
expect increasing margin pressure as producers are forced to reduce
capacity utilization as a result of weakening demand. Cost pressure,
mainly driven by energy and raw material prices, is expected to ease
due to the negative economic developments and lower oil prices.
However, developments are uncertain and volatility in the commodity
markets will impact cost levels going forward.

The overall outlook for the European extrusion market is weak with
lower demand across most market segments, in particular the
automotive and transportation segments. Demand in the Northern
regions is stronger than Southern Europe. The negative market outlook
is expected to result in increased pressure on margins. In the US,
extrusion markets are expected to remain severely depressed, with no
signs of recovery. South American markets are expected to experience
continued growth, but at a lower pace.

Demand in North American automotive market shows no signs of
recovering from the very low levels of previous quarters. Automotive
demand in Asia and South America show signs of weakening from the
robust levels experienced previously.

The deepening global economic crisis is resulting in significant
market uncertainty, in particular the capital intensive transport and
building markets. We also expect the ongoing turmoil in the credit
markets to continue to heavily impact developments in these markets.

Outlook for Hydro
Measures to significantly reduce costs and manning in our US
extrusion operations were carried out in 2007 and continued in 2008.
Improvement initiatives were also implemented resulting in
substantial cost savings and manning reductions in our North American
precision tubing business and our world wide automotive structures
operations. Our focused efforts to improve the profitability of these
businesses have helped prepare us for the sudden and dramatic market
developments which occurred towards the end of the year but can only
partly compensate for the unprecedented fall in market demand. As the
impact of the global recession influences European markets, further
actions across all of our business sectors have been identified
including additional shift and manning reductions, procurement
initiatives to capitalize on falling raw material prices as well as
reductions in capital expenditures and working capital. These
measures will enable us to meet market pressures as the on-going
recession in Europe and the US impacts demand during 2009.

Energy
Underlying EBIT for Energy improved significantly from the third
quarter of 2008 mainly due to higher power production and continued
strong spot prices. Power production in the fourth quarter has been
higher than expected, primarily due to higher reservoir precipitation
than normal during the period. The improvement compared with the
fourth quarter of 2007 was due to significantly higher power
production and spot prices.

Direct power production costs increased by 31 percent compared with
the third quarter of 2008, mainly due to higher transmission costs
and higher maintenance activity.

Hydro's solar activities recorded an underlying loss of NOK 52
million in the fourth quarter of 2008 compared with a loss of NOK 19
million in the third quarter and a loss of NOK 49 million in the
fourth quarter of 2007.

Energy's underlying EBIT for the full year of 2008 improved by 47
percent compared with 2007. The increase was mainly due to
significantly higher spot prices and somewhat higher power production
than the high level experienced in 2007. Solar activities reported a
loss of NOK 130 million for the full year 2008.

Outlook
Nordic power prices have declined further during the first weeks of
2009 but high winter consumption of power and lower than normal water
reservoir levels in Norway and Sweden are expected to support power
prices at a fairly high level throughout the first quarter of 2009.
While power prices in the Nordic region will continue to be impacted
by local market conditions, including hydrological conditions, price
levels going forward are expected to be negatively impact by the
general economic downturn and lower power prices on the European
Continent.

Water reservoir levels in Norway were about 65 percent of full
capacity in early January 2009, which is 5 percent points lower than
normal and 9 percent points lower than the same period in 2008.

The planned recovery of the reduced import/export transmission
capacity from Southern Norway has been significantly delayed. The
Norwegian system operator, Statnett, does not expect all transmission
lines to be fully operational before May 2009.

Hydro's power production is expected to remain at a seasonally high
level in the first quarter of 2009. However, production plans will be
influenced by the reservoir situation and power market developments.

Corporate, other and eliminations
Underlying EBIT for Corporate, other and eliminations amounted to NOK
81 million in the fourth quarter compared with a negative NOK 239
million in the third quarter of 2008 and a negative NOK 50 million in
the fourth quarter of 2007. Underlying EBIT included an elimination
of unrealized profits on inventories purchased from group companies
amounting to a credit of NOK 273 million in the fourth quarter
compared to NOK 63 million and NOK 38 million in the third quarter of
2008 and fourth quarter of 2007, respectively. The amount for the
third quarter included charges of NOK 150 million relating to a
change in the allocation of corporate overhead costs which was offset
by positive adjustments included in underlying EBIT for the business
areas, mainly Aluminium Metal (NOK 89 million) and Aluminium Products
(NOK 76 million).

Items excluded from underlying EBIT and income from continuing
operations
To provide a better understanding of Hydro's underlying performance,
the items in the table below have been excluded from EBIT and income
from continuing operations.

Items excluded from underlying EBIT are comprised mainly of
unrealized gains and losses on certain derivatives, impairment and
rationalization charges, effects of disposals of businesses and
operating assets, as well as other items that are of a special nature
or are not expected to be incurred on an ongoing basis.


Items excluded from
underlying income from
continuing operations
Fourth Third Fourth Year Year
NOK million quarter quarter quarter 2008 2007
2008 2008 2007
Unrealized derivative
effects on LME related 1,984 35 101 1,120 131
contracts
Unrealized derivative (1,481) (1,038) 666 768 928
effects on power contracts
Unrealized derivative
effects on currency 265 150 (5) 314 (137)
contracts
Metal effect, Rolled 407 (38) 300 235 235
Products
Significant rationalization 109 - 55 109 224
charges and closure costs
Impairment charges (PP&E and
equity accounted 2,464 - - 2,464 144
investments) 7)
Loss provisions (power 257 - 257 -
contracts)
(Gains)/losses on (29) (34) (5) (453) (641)
divestments
Correction of elimination of - - 296 - 291
profit in inventory
Germany, change in tax rate - - (47) - (47)
Items excluded from 3,975 (924) 1,361 4,815 1,128
underlying EBIT
Net foreign exchange 4,629 2,015 (74) 5,491 (2,254)
(gain)/loss
Calculated income tax (2,943) (248) (353) (3,460) 325
effect
Germany, change in tax rate - - (50) - (300)
Items excluded from
underlying income from 5,661 843 884 6,846 (1,101)
continuing operations


Finance
Finance expense amounted to NOK 4,487 million in the quarter,
compared with NOK 1,980 in the previous quarter. During the quarter,
both the US dollar and Euro have strengthened against the Norwegian
kroner resulting in net foreign exchange losses of about NOK 4.6
billion. Approximately half of the losses related mainly to Hydro's
US dollar hedging program. The remainder related to losses on
intercompany balances denominated in Euro. The Euro losses have no
cash effect and are offset in equity by translation of the
corresponding subsidiaries during consolidation.

Interest income increased in fourth quarter compared to third quarter
due to interest earnings related to tax claims.

At end of 2008 cash and cash equivalents amounted to NOK 3.3 billion
down from NOK 9.3 billion at the end of 2007.

Tax
Income taxes amounted to a positive NOK 1,748 million in the fourth
quarter compared with a charge of NOK 201 million in the third
quarter of 2008 and a positive amount of NOK 58 million in the fourth
quarter of 2007. For the year 2008, Income taxes amounted to a
positive NOK 565 million compared with a charge of NOK 3,075 million
for 2007 representing about 15 percent and 25 percent of Income from
continuing operations before tax respectively.

Positive Income taxes for the fourth quarter of 2008 and for the year
as a whole result from the operating losses incurred in these
periods. Income taxes for 2008 were also influenced by tax charges
related to power surtaxes amounting to roughly NOK 500 million.

Press contact
Contact Halvor Molland
Telephone +47 22532421
Cellular +47 92979797
Email Halvor.Molland@hydro.com

Investor contact
Contact Stefan Solberg
Telephone +47 22539280
Cellular +47 91727528
Email Stefan.Solberg@hydro.com


*************
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 announcement was originally distributed by Hugin. The issuer is
solely responsible for the content of this announcement.

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