OSLO, Norway, Oct. 15, 2002 (PRIMEZONE) -- Norsk Hydro (NYSE:NHY) reports the following effects and their consequences for the company's third quarter results in 2002.
Norsk Hydro has now completed an extensive evaluation of prospects for the company's Block 34 licence in Angola. Two further exploration wells in other parts of the 6,000 sq.km area are planned, but the company has decided to expense the remaining part of previously capitalized costs of acquiring the licence rights. This will give rise to a charge of NOK 480 million. The third exploration well in the Gulf of Mexico, Spa, has been concluded without a discovery being made. A charge of roughly NOK 300 million will be made for this, including the previously capitalized costs of acquiring the licence rights. Although a discovery was made in the Svane well on the Danish shelf, this is not considered commercial and NOK 140 million will be expensed during the quarter. Altogether, exploration costs of some NOK 1.3 billion will be charged to Hydro's results in the third quarter.
The quarterly results for Aluminium will be affected by weak market conditions and a continued fall in aluminium prices during the quarter. In addition, there will be an unrealized currency loss of NOK 380 million relating to the associated company Alunorte in Brazil.
Oil and gas operations on the Norwegian shelf are the source of a considerable share of Hydro's pretax results, and are subject to a marginal rate of taxation of 78 percent. Roughly NOK 1.1 billion of the total exploration costs in the third quarter relate to activities outside Norway. The combination of high marginal tax on earnings from the Norwegian continental shelf and the expensing of major costs internationally, will result in an unusually high rate of taxation for third quarter. Hydro expects the tax rate in the third quarter to be 80 90 percent. Certain statements in this press release are or may constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not in the nature of historical facts may be deemed to be forward-looking statements and may contain identifying words such as "believes," "anticipates," "plans," "expects" and similar expressions. These forward looking statements are based on Hydro's current expectations, assumptions, estimates and projections about the company and the industries in which it engages in business. All forward-looking statements involve risks and uncertainties. For a detailed description of factors that could cause Hydro's actual results to differ materially from those expressed in or implied by such statements, please refer to its annual report on Form 20F for the year-ended December 31, 2001 and subsequent filings on Form 6K with the U.S. Securities and Exchange Commission.
Norsk Hydro ASA Bygdoey alle 2 N0240 Oslo Norway Telephone: (47) 22 53 81 00 Fax: (47) 22 53 27 25 www.hydro.com