OSLO, Norway, Oct. 20, 2003 (PRIMEZONE) -- Norsk Hydro (NYSE:NHY) (Pink Sheets:NHYKF) (Pink Sheets:NHYAF) (LSE:NHYq):
Third quarter 01.01.-30.09. Year
2003 2003 2002 2003 2003 2002 2002
Million, except
per share data NOK EUR(1)) NOK NOK EUR(1)) NOK NOK
Operating
revenues 41,857 5,116 40,813 127,249 15,553 123,033 167,040
Operating
income 5,730 700 3,945 17,121 2,093 13,845 19,841
Non-consolidated
investees 181 22 (356) 850 104 (451) 33
Interest income and
other financial
income 315 39 210 1,118 136 1,084 1,418
Other income, net 139 17 - (1,702) (208) 219 219
Earnings before
interest expense
and taxes (EBIT) 6,365 778 3,799 17,387 2,125 14,697 21,511
Interest expense
and foreign
exchange
gain/(loss) (2) - (628) (1,288) (157) 294 517
Income before taxes
and minority
interest 6,363 778 3,171 16,099 1,968 14,991 22,028
Income tax
expense (4,039) (494) (2,701)(9,301) (1,137) (9,549) (13,278)
Minority interest 73 9 43 124 15 43 15
Income before
cumulative effect
of change in
accounting
principle 2,397 293 513 6,922 846 5,485 8,765
Cumulative effect
of change in
accounting
principle - - - 281 34 - -
Net income 2,397 293 513 7,203 880 5,485 8,765
Earnings per
share before change
in accounting
principle
(in NOK and EUR) 9.30 1.10 2.00 26.80 3.30 21.30 34.00
Earnings per share
(in NOK and EUR) 9.30 1.10 2.00 27.90 3.40 21.30 34.00
Financial data EBITDA (2)) - million 10,414 1,273 7,490 30,855 3,771 25,203 35,658 Investments - million 4,680 572 3,712 13,713 1,676 39,767 45,716 Net interest- bearing debt/equity (3)) 0.24 0.24 0.43 0.24 0.24 0.43 0.44
1) Presentation in Euro is a convenience translation based on the exchange rate at September 30, 2003, which was 8.1817. 2) Earnings Before Interest, Tax, Depreciation and Amortization. 3) Net interest-bearing debt divided by shareholders' equity plus minority interest.
Norsk Hydro's net income in the third quarter of 2003 was NOK 2,397 million (NOK 9.30 per share) compared to NOK 513 million (NOK 2.00 per share) in the same period last year. Operating income in the third quarter amounted to NOK 5,730 million, an increase of 45 percent compared to the corresponding period in 2002.
Higher oil and gas production, together with lower oil and gas exploration costs were the main factors underlying the improved operating results.
Net income before the effects of changes in accounting principles for the first three quarters of the year was NOK 6,922 million (NOK 26.80 per share), compared to NOK 5,485 million (NOK 21.30 per share) in the same period last year.
"It is particularly pleasing to note that Hydro's good results in Oil and Energy are based on strong production growth and good cost control, as well as high oil and gas prices," says President and CEO Eivind Reiten.
"The start-up of the Grane and Fram Vest fields on schedule and with costs well below budget demonstrate our ability to manage large, complex development projects. Our organization's success in maintaining a high level of production regularity has contributed to an upward adjustment of the estimate for this year's oil and gas production to 520,000 barrels of oil equivalent per day (boed) compared to the previous estimate of 510,000 boed."
"The aluminium results remain weak, but the continued high pace of our improvement programs is very positive. Our decision to participate in the further expansion of the alumina refinery, Alunorte in Brazil represents another step to secure a competitive source of raw materials for our aluminium operations. Developments in the fertilizer markets are good, and Agri stands as a competitive and well-run fertilizer operation as it prepares to spin-off as a separate listed company," continues Reiten.
Hydro's oil and gas production in the third quarter averaged 489,000 boed per day, an increase of 8 percent compared to the same period last year. Oil prices in Norwegian kroner were substantially unchanged, while the price of natural gas was 17 percent higher than in the corresponding period last year. Hydro expects considerably higher production in the fourth quarter with total production estimated at 520,000 boed for the year as a whole, and 560.000 boed for the fourth quarter. Exploration costs charged against income in the third quarter amounted to NOK 303 million.
Hydro signed an agreement in the third quarter for the sale of the company's share in the Scanraff oil refinery in Sweden. The agreement is expected to be concluded in the fourth quarter after approval from the authorities and result in a gain on disposal of approximately NOK 600 million.
Aluminium's operating income in the third quarter was slightly higher than the prior year. The markets for semi-finished products remain weak, while metal prices in dollar terms are somewhat higher. Prices measured in Norwegian kroner, however, are slightly lower. The cost improvement programs continue and are on target.
Agri results reflect stronger markets for most fertilizer products, but the improvements were partly offset by the effect of high energy prices on raw material costs. Sales volumes were stable after adjusting for the effects of disposals of non core activities since the equivalent period of last year.
The Board's decision taken in the second quarter to prepare for the spin-off of Hydro's Agri operation has been followed up by an extensive process to establish the best possible decision basis for selecting the type of transaction and the practical implementation. External advisors have been engaged and the plan for Hydro Agri to be listed as a separate company during the course of the first half of 2004 is on schedule.
The provision for taxes for the first three quarters was NOK 9,301 million, representing approximately 58 percent of pre-tax income. The tax provision has been strongly influenced by amendments to the Norwegian tax regulations relating to the future costs of removing oil and gas installations on the Norwegian continental shelf after production has ceased. In addition, the tax provision for the third quarter 2003 included a onetime positive effect of NOK 139 million relating to the final conclusion of an outstanding tax ruling. Excluding these effects, tax expense amounted to 65 percent of pre-tax income for the first three quarters and 66 percent for the third quarter of 2003.
Investments in the third quarter of 2003 amounted NOK 4,680 million. Just over half of the investments related to oil and gas operations.
Cash flow from operations for the first three quarters was NOK 23.2 billion (NOK 19.8 billion) mainly due to higher earnings.
Hydro has earlier established a goal to dispose of non-core business assets totaling NOK 10 billion during 2002 and 2003. As of the end of the third quarter 2003, disposals have been completed or agreed for approximately NOK 9 billion.
Third quarter 2003
Non-cons.
inv.,
Operating Interest & Depreciation
income selected Other and
NOK million (loss) fin.items income amortization EBITDA
Hydro Oil and
Energy 5,322 3 - 2,420 7,745
Hydro Aluminium 530 39 - 929 1,498
Hydro Agri 464 187 - 338 989
Other Activities (318) 77 139 360 258
Corporate and
Eliminations (268) 190 - 2 (76)
Total 5,730 496 139 4,049 10,414
01.01.-30.09.2003
Non-cons.
inv.,
Operating Interest & Depreciation
income selected Other and
NOK million (loss) fin.items income amortization EBITDA
Hydro Oil and
Energy 15,149 117 326 7,095 22,687
Hydro Aluminium 1,747 398 - 2,544 4,689
Hydro Agri 1,893 506 - 865 3,264
Other Activities (424) 322 162 748 808
Corporate and
Eliminations (1,244) 625 (2,190) 2,216 (593)
Total 17,121 1,968 (1,702) 13,468 30,855
Further information about Norsk Hydro ASA and the company's third quarter results are available on the Internet: www.hydro.com
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 20-F for the year-ended December 31, 2002 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission. With respect to each non-GAAP financial measure Hydro uses in connection with its financial reporting and other public communications, Hydro provides a presentation of what Hydro believes to be the most directly comparable GAAP financial measure and a reconciliation between the non-GAAP and GAAP measures. This information can be found in Hydro's earnings press releases, quarterly reports and other written communications, all of which have been posted to Hydro's website (www.hydro.com).