Quarterly guidance

Ahead of the quarterly results release, Hydro Investor Relations reminds analysts and investors about the relevant publicly available information and guidance for the next quarter

Business area outlook for Q1 2017 as provided in the Q4 2016 presentation:

Bauxite & Alumina

  • Lower bauxite and alumina production due to planned maintenance
  • Higher raw material costs at Alunorte
  • Higher index exposure

Primary Metal

  • ~ 50% of primary production for Q1 priced at USD ~1 725 per mt, ex-Qatalum
  • ~ 55% of premiums affecting Q1 booked at USD ~310 per mt, ex-Qatalum
  • Q1 realized premium expected in the range of 225-275 USD/mt
  • Higher raw material costs
  • Higher sales volumes

Metal Markets

  • Seasonally higher metal product and remelter sales
  • Volatile trading and currency effects

Rolled Products

  • Continuous margin pressure
  • Seasonally stronger demand
  • Neuss results driven by all-in metal and raw material price development

Energy

  • Price and volume uncertainty
  • Higher property taxes

Additional information

  • Hydro’s 50% interest in Sapa is accounted for as equity accounted investment after closing of the transaction. In the profit and loss statement, Sapa is included with Hydro’s share of net income under “Other and eliminations”

  • The latest available price and currency sensitivities for earnings are included in the Q4 Investor presentation
  • Hydro completed the acquisition of Vale’s remaining shareholding in Paragominas in Q4 2016. The transaction had a positive impact for Bauxite & Alumina of approximately NOK 150 million on its underlying result in Q4 2016.

Publicly available information regarding the market prices and currency developments in Q1 2017:

  • The average LME-spot market rate in Q1 was USD 1 851 vs USD 1 710 in Q4
  • The average USD/NOK market rate in Q1 was 8.44 vs 8.38 in Q4
  • The Nordpool power price for NO2 (where Hydro has ~2/3 of the production) in Q1 was 278 NOK/MWh vs 296 in Q4 
  • The Nordpool power price for NO5 (where Hydro has ~1/3 of the production) in Q1 was 276 NOK/MWh vs 300 in Q4
  • The Nordpool power price for NO3 in Q1 was 281 NOK/MWh vs 333 in Q4

Updated: January 5, 2017