(February 17, 2010)
Hydro had an underlying loss before financial items and tax of NOK 651 million in the fourth quarter of 2009, compared with a loss of NOK 793 million in the previous quarter, firming slightly on higher realized aluminium prices. Hydro reached a major milestone in December with the start-up of the first cell at Qatalum, and production from all 704 cells at the world-leading aluminium plant in Qatar is expected by fourth quarter 2010.
Fourth quarter underlying loss before financial items of NOK 651 million
Higher realized aluminium prices, but weak alumina and trading results
Downstream result improves for continued operations, boosted by Building Systems
Stable demand for aluminium products, seasonal decline partly offset by restocking
Energy result up on higher production and spot power prices
Qatalum production started in December, on schedule for full production by fourth quarter 2010
Divestment of Automotive Structures and Inasa rolling mill completed
Demand for aluminium expected to grow modestly in first half 2010 against second half 2009
Proposed dividend of NOK 0.50 per share


Full report

On time and on cost
“The commissioning of Qatalum on time and on cost is a great achievement, and a result of our 40 years of cooperation with Qatar and Qatar Petroleum. I am proud to announce that Norway’s largest foreign onshore investment ever is now in operation,” said Svein Richard Brandtzæg, President and CEO of Hydro.

Qatalum is being built in Mesaieed, Qatar, and is an equal joint venture between Qatar Petroleum and Hydro.

Strengthens Hydro’s position
Brandtzæg underlines that Qatalum represents a significant strengthening of Hydro’s position as one of the leading producers in the global aluminium industry.

“When Qatalum is at full production during next year, the plant will open new, markets for Hydro and supply the Middle East, Asia and North America with 585,000 tonnes on an annual basis," he says.
Hydro’s equity share is 290,000 tonnes.

Praise for Projects team
Construction of Qatalum is managed by Hydro’s project organization. The Hydro chief executive is full of praise for the efforts of the men and women in the Project team who, in cooperation with numerous international and local contractors and suppliers, have made this achievement.

Now an operating team soon to be around 1,100 is ready to start operations. Brandtzæg: “The commissioning of Qatalum is an important and pleasant bright spot in a challenging year. It will stand out as a milestone in Hydro’s history.

Qatalum has been brought to completion on time in a region in the early stage marked by a globally unprecedented construction boom and then followed by a global financial crises. “In other words, it has been difficult, with a number of rocks to stay clear of. But today we can establish that we have navigated by them all,” says Brandtzæg.

Short construction timeline
With the start-up the first cell in the Qatalum plant in Qatar, one of the largest and most modern primary aluminium plants has risen from the desert sands in just 25 months.

Total investment costs including establishment of the Qatalum organization are approximately $5.7 billion (NOK 33 billion). Hydro’s share of the investment is 50 per cent.

According to the agreements, Hydro will bring all the products to the markets. Qatalum will now be a part of Hydro’s global network as one of the most cost efficient plants anywhere.

At its peak, construction work at site employed more than 20,000 workers from all corners of the world. It has been executed with a remarkable safety record and with a support and service to the workers setting a new standard for projects in the Middle East.

Cutting-edge technology
“This is cutting-edge technology, developed in Norway by Hydro’s facilities and in cooperation with the Norwegian aluminium cluster. The commissioning of this great plant is an achievement for Hydro – for Norway and for Norwegian technology as well as for Qatar Petroleum and Qatar,” says Brandtzæg.

(December 2, 2009)
Hydro has entered into an agreement to divest its aluminium rolling mill in Irurtzun, Spain, to the German industrial holding company Bavaria Industriekapital AG.


The agreement opens up for a more viable development of the small Inasa plant, located near Pamplona, while Hydro will continue serving its global customers of rolled aluminium products, including in Spain.

The transaction is expected to be cash-neutral and result in a book loss after tax of about NOK 200 million in the fourth-quarter results. Pending regulatory approval, Hydro expects the transaction to close by the end of 2009 or in early 2010.

“This is a good solution for the employees and for Bavaria, who can develop their business in a new context, but also for Hydro, as we pursue the strategy to optimize our portfolio in rolling and focus on our core mills,” says Executive Vice President Oliver Bell, who is responsible for the Rolled Products business area in Hydro.

The Inasa plant was established in 1956, and joined Hydro in 2002 as part of the acquisition of VAW aluminium AG. It has a production capacity of 30,000 tonnes per year, mostly light-gauge foil and strip. It currently has 221 employees, making it Hydro’s smallest mill in Europe.

Hydro is a leading, worldwide supplier of rolled aluminium products, shipping up to 1 million tonnes per year. The rolled products business area employs a workforce of more than 4,000 in a strong network of European rolling mills in Germany, Norway and Italy, plus one foil rolling mill in Malaysia. Hydro is the world market leader in the manufacture of lithographic sheet for the printing industry and of ultra-thin foil for aseptic packaging.

Bavaria Industriekapital AG is specializing in the takeover and re-organization of enterprises that yield little or no profit. In October, the company signed an agreement to acquire the Inasa plant’s local competitor, Alcoa Sabiñanigo.

After the agreed transaction has been closed, Hydro will continue to serve the Spanish sites of its global rolled products customers and maintain its area sales office in Barcelona.

Hydro is the leading player in Spain’s extrusion business and also in the field of aluminium building systems, and recycles aluminium at its remelt plant in Azuqueca. Hydro has more than 700 employees at these sites, located mostly in northern Spain and close to Madrid.