Norsk Hydro ASA's underlying earnings before financial items and tax (EBIT) increased to NOK 2,886 million in the fourth quarter, up from NOK 1,490 million in the third quarter of 2014.
Article continues below
Bauxite & Alumina and Primary Metal delivered their highest quarterly results since 2007.
Underlying EBIT for Bauxite and Alumina improved significantly in the fourth quarter reflecting higher realized alumina prices, higher sales volumes and lower operating costs at Alunorte together with positive currency developments. Bauxite production increased in the quarter reaching 10.2 million mt on an annualized basis.
"I am pleased to see the highest quarterly results we have reported since we became a pure play aluminium company in 2007. For the second quarter in a row, we also see a solid improvement in operating costs at Alunorte and Paragominas, as well as increased production levels, reflecting robust operations," says president and CEO, Svein Richard Brandtzaeg.
"In line with our commitment to return cash to our shareholders, the Board of Directors proposed to raise the annual dividend from NOK 0.75 per share to NOK 1 per share, and at the same time revised the dividend policy from 30% to 40% of net income over the cycle†Brandtzæg continues.
Underlying EBIT for Primary Metal improved substantially in the fourth quarter influenced by a further increase in realized aluminium prices and product premiums. The strengthening USD compared to the NOK and BRL also had a significant positive impact on underlying results for the quarter.
Operating cash flow amounted to NOK 4.4 billion for the fourth quarter. Cash used for investment activities amounted to NOK 0.8 billion net of sales proceeds. Hydro's net debt position amounted to NOK 0.1 billion at the end of the fourth quarter also influenced by unrealized currency losses, payment of dividends to minority interests and a payment to Vale representing the first of two tranches for the remaining Paragominas shares.
For the full year, underlying EBIT more than doubled to NOK 5,692 million compared with NOK 2,725 million in 2013 influenced by the significant increase in all-in metal prices1) together with the strengthening US dollar compared to the NOK and BRL. ■