Second quarter 2009: Solid cash flow and cost savings, markets remain weak

by Hydro Aluminium AS 22 Jul 08:12

Hydro had an underlying loss before financial items of NOK 618 million in the second quarter, compared with a NOK 493 million loss in the first quarter, as the weak global economy continued to weigh on historically low aluminium markets. Results in downstream operations improved due to seasonally stronger demand and swift adjustments made early in the downturn.
Second quarter underlying loss before financial items of NOK 618 million
Focus on preserving cash, NOK 2.0 billion in operating cash flow in quarter
Aluminium demand apparently flattened out at low level after historic drop
Capacity curtailments of 460,000 tonnes a year completed
Solid progress on cost reduction program, significant savings in operating costs
Qatalum 84 percent complete by end-June, on schedule for start up around end of year
Energy posted an underlying EBIT of NOK 281 million in the quarter, down from NOK 447 million in the previous quarter due to lower production and spot sales.

“Although we are going through the most difficult period the aluminium industry has ever experienced, we see very positive effects from our significant cost and capacity adjustments,” President and Chief Executive Officer Svein Richard Brandtzæg said.

“We remain cautious about the outlook for global aluminium demand ahead of the second half of the year, which is normally seasonally weaker than the previous six months, and will continue to execute our cost reduction program and maintain financial flexibility,” he said. “With the substantial reduction in operating capital, reduced input costs and strengthened market positions, we are well-positioned for capturing opportunities.”