Norsk Hydro's net income in the second quarter of 2002 was NOK 2,840 million (NOK 11.00 per share), compared to NOK 2,180 million (NOK 8.40 per share) for the corresponding period of the previous year. The result is strongly impacted by foreign currency effects and includes gains primarily in connection with loans and financial derivatives of NOK 2,471 million. Operating income is NOK 988 million lower than the same period of last year.
Net income for the first half-year is NOK 4,792 million (19.30 per share), compared to NOK 5,415 million (20.90 per share) for the corresponding period of last year.
Earnings in all business areas were negatively impacted by a weaker US dollar and a stronger Norwegian krone. The effect of the weaker US dollar was particularly noticeable towards the end of the second quarter. The US dollar weakened by xx percent over the first half-year and by xx percent in the second quarter alone. An unchanged exchange rate will negatively affect future earnings from operating activities.
" I consider these results satisfactory given current market conditions. It is pleasing to report that internal improvement processes have brought results in the form of lower costs, and that our financial position is still strong at a time of continued uncertainty regarding global economic developments. Our aluminium operation has successfully completed the integration of the acquired companies VAW and Technal. There has been considerable growth in oil and gas production, but it is disappointing that exploration has not increased our resources in any substantial way. Our results to come will be negatively influenced by recent foreign exchange movements, and I do not envisage that current market conditions will improve substantially. This underlines the necessity for us to continue placing considerable emphasis on Hydro's improvement processes and strengthening our market positions," says President and CEO Eivind Reiten.
Hydro has in the second quarter achieved a record high production of oil and gas. The increase is largely due to new fields coming on stream and to the acquisition of former SDFI ( State Direct Financial Interest) assets on Norwegian fields. Exploration costs amounting to NOK 936 million have been charged to the accounts for the second quarter, compared with NOK 365 million in the same period of the previous year.
Second quarter 2002 results for Hydro Aluminium include the VAW and Technal operations, both of which were acquired by Hydro in the course of the first quarter. The increased activity resulting from these acquisitions has contributed to the improved results for this business area. Lower aluminium prices, especially when expressed in Norwegian kroner, have weakened the result.
The result for Hydro Agri, when adjusted for non-recurring effects, declined in both the second quarter and the first half compared to the
corresponding periods in 2001, due particularly to low ammonia and urea prices.
Results for the first half of 2002 include a NOK 6,848 accrual for income tax expense. This represents approximately 58 percent of income before taxes. During the first half of 2001, income tax expense represented approximately 60 percent of income before taxes and minority interest.
Further information about Norsk Hydro ASA and the second quarter results 2002 are available on the Internet: www.hydro.com
For report with tables, follow this link: http://reports.huginonline.com/867161/105803.pdf