Norsk Hydro's net income in the first quarter of 2002 was NOK 2,132 million (NOK 8.30 per share) compared to NOK 3,235 million (NOK 12.40 per share) for the corresponding period of the prior year. The decline in net income was principally due to lower prevailing oil and gas prices and aluminium prices.
Hydro completed the acquisition of VAW aluminium AG, the German aluminium company, on March 15, 2002. Hydro's consolidated results for the first quarter of 2002 include the operating results of VAW from that date.
Hydro's oil and gas production in the first quarter of 2002 was somewhat higher than in the comparable period of the prior year as a result of increased international production, primarily from the Girassol (in Angola) and the Terra Nova (in Canada) fields which came onstream in December 2001 and January 2002 respectively. Oil production in Norway during the first quarter of 2002 was negatively influenced by the curtailment in production directed by Norwegian government. The production limits are scheduled to be discontinued by the end of the second quarter.
During the quarter, Hydro entered into an agreement to acquire additional license interests in important Hydro-operated fields in the North Sea in connection with the sale of assets of the Norwegian State's Direct Financial Interests (SDFI). The acquisition of such interests, expected to occur by the end of the second quarter, will affect reported operating and production results from that point in time.
First quarter 2002 results for Hydro Agri were somewhat lower than in the corresponding period of the prior year. Substantial price reductions for fertilizer products were largely offset by increased volumes, lower gas prices, cost reductions and the positive effects of other improvement efforts.
Results for the first quarter of 2002 included a NOK 2,634 million accrual for income tax expense. This represents approximately 55 percent of income before taxes and minority interest of NOK 4,762 million. During the first quarter of 2001, income tax expense (NOK 4,201 million) represented approximately 57 percent of income before taxes and minority interest (NOK 7,315 milllion).
Reorganization processes and the integration of VAW have resulted in certain changes in segment reporting. Hydro's three core business areas remain the same, but the sub-segments within each core area have been revised. In addition, certain operations identified as non-core activities are shown under "Other activities". This includes Petrochemicals, KFK and VAW's Flexible Packaging operations. The figures from previous periods have been restated in the tables below to show comparable information.
More information on Norsk Hydro ASA and on the first quarter results for 2002 is available on the Internet: http://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, 2001 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission.
