• Underlying EBIT of NOK 2,667 million
• Record downstream results on seasonally stronger sales
• Lower realized alumina and all-in aluminium prices
• New ICMS tax-framework in place
• Long-term power sourcing secured for Rheinwerk
• Continued challenging global market balance
• 2015 global primary aluminium demand growth ~5%

"Results this quarter are affected by weaker prices, but I am pleased to see demand growing and aluminium taking over as the preferred metal in more and more applications, contributing to record results in our downstream operations," says President and CEO Svein Richard Brandtzæg.

Underlying EBIT for Bauxite and Alumina decreased in the second quarter reflecting lower LME-linked alumina prices, a decline in alumina index prices and lower index based sales volumes.

"We are pleased to have agreed on a long-term ICMS framework for Hydro’s operations in Pará, which is fundamental to our ambition to develop robust and viable operations in Pará and to be an enabler for sustainable growth in the region," says Brandtzæg.

Primary Metal underlying EBIT declined in the second quarter, mainly due to lower realized aluminium prices and premiums.

Underlying EBIT for Metal Markets declined in the second quarter impacted by higher negative currency and inventory valuation effects. Sourcing and trading operations continued to incur underlying losses, reflecting the further fall in standard ingot premiums. Results from remelt operations improved mainly due to higher margins.

"Improved results in Rolled Products and Sapa are partially offsetting the effect of a challenging upstream market. The rapidly changing market conditions demonstrate the importance of our company-wide improvement programs, where the combined efforts strengthen our bottom line," says Brandtzæg.

Rolled Products delivered improved underlying EBIT mainly driven by seasonally higher shipments and somewhat better operating margins. Results were negatively influenced by a decrease in the contribution from the Rheinwerk smelter and negative currency developments.

Underlying EBIT for Energy declined compared to the first quarter, mainly due to seasonally lower production also influenced by the delayed spring thaw in the Norwegian mountains.

Underlying EBIT for Sapa increased compared to the previous quarter, due to seasonally higher sales volumes, strong North American market development, as well as improvement programs progressing ahead of plan across the organization. The second quarter results were also negatively affected by sharply falling metal premiums in North America.

Operating cash flow amounted to NOK 4.2 billion for the second quarter. Cash used for investment activities amounted to NOK 1.2 billion. Dividends paid during the quarter amounted to NOK 2.0 billion. Hydro's net cash position amounted to NOK 0.7 billion at the end of the second quarter.

Reported earnings before financial items and tax amounted to NOK 2,698 million in the second quarter. In addition to the factors discussed above, reported EBIT included net unrealized derivative gains and positive metal effects of NOK 132 million in total and a compensation of NOK 37 million relating to insurance proceeds. Reported earnings also included a charge of NOK 139 million (Hydro's share) for Sapa net of tax, including NOK 106 million relating to restructuring charges.      

In the previous quarter reported earnings before financial items and tax amounted to NOK 3,206 million including net unrealized derivative gains and positive metal effects of NOK 72 million in total. Reported earnings also included a charge of NOK 74 million (Hydro's share) for Sapa mainly relating to unrealized derivative losses.     

Net income amounted to NOK 2,064 million in the second quarter including a net foreign exchange gain of NOK 346 million due to unrealized currency gains on US dollar debt mainly in Brazil. In the previous quarter, net income was NOK 1,072 million including a net foreign exchange loss of NOK 1,587 million mainly due to the strengthening of the USD.