Norsk Hydro ASA and Orkla ASA are combining their profiles, building systems and tubing business to create a world leader in aluminium solutions called Sapa. This joint venture will be 50/50 owned by the two companies. It consists of the current offering of Orkla’s fully-owned Sapa and Hydro’s Extruded Products business area. Orkla will also be compensated 1.8 billion to account for size difference of the units. The combined entity had a turnover of around 47 billion NOK, underlying EBITDA of 1.9 billion and some 25 000 employees based on 2011 figures.
The combination requires approval from competition authorities; new company will be a market leader in Europe and North America in addition to its presence in emerging markets. Completion of the transaction is expected in H1 2013. The parties feel that the new company will be better positioned to restructure the business and expects 1 billion NOK in annual synergies.
Showing posts with label Hydro. Show all posts
Showing posts with label Hydro. Show all posts
Monday, 15 October 2012
Tuesday, 24 July 2012
Norsk Hydro calls result and market situation weak
Low aluminium prices and a challenging macro-economic market is leading to more measures including capacity adjustments and operational measures to be started by Norsk Hydro (OSE: NHY). Second quarter revenue of 21.6 billion was down by a percent sequentially even though it tends to be the opposite. Underlying earnings came in at 549 million and reported EBIT at -720 million reflecting a near 1.2 billion charge on the expected decision of closure of remaining production at Kurri Kurri just months after one production line was discontinued. The company expects around 2% aluminium demand growth ex-China in 2012.
Monday, 30 April 2012
Hydro: continued weak demand
Aluminium company Norsk Hydro’s (OSE: NHY) sales of 21.75 billion NOK were unchanged year-on-year during Q1 2012. The company blamed lower realized aluminium prices and weakness in European extrusion operations for its sliding profit numbers. Underlying EBIT of 557 million is half of last year’s level. Reported EPS of 0.25 NOK includes some unrealized derivatives gains. Underlying EPS is 0.13 NOK.
Sold production performance and strong Energy results were the positives. The company forecasts 2012 aluminium demand growth outside China to be round about 3%, barring any negative surprises from Europe. The company will continue to restructure and find other means to reduce costs. It has forward contracted 80% of expected Q2 primary aluminium production at around 2200 USD per Metric Ton. This leaves low double-digit EBITDA margin at current costs. The stock lost some ground on Friday.
Sold production performance and strong Energy results were the positives. The company forecasts 2012 aluminium demand growth outside China to be round about 3%, barring any negative surprises from Europe. The company will continue to restructure and find other means to reduce costs. It has forward contracted 80% of expected Q2 primary aluminium production at around 2200 USD per Metric Ton. This leaves low double-digit EBITDA margin at current costs. The stock lost some ground on Friday.
Wednesday, 11 April 2012
Nordic markets retreat ahead of Q1 2012 earnings releases
Nordic exchanges returned from holidays worried about the macroeconomic numbers. Worries about Spain have been mounting as the Euro zone gears up for the ultimate showdown. Numbers from China were interpreted in a way that strengthened the already dour mood from United States non-farm payrolls miss.
Nordic high beta stock posted ugly numbers with many large cyclical stocks nearing double-digit losses. The gainers were few and far between. Thrane & Thrane (OMXC: THRAN) predictably was among them as Cobham followed up on its recent purchases with a cash offer of DKK 420 for each share.
Norsk Hydro's (OSE: NHY) peer Alcoa kick-started earnings season across the pond with better than expected numbers after market close. The American aluminium company maintained its expectations for global aluminium demand growth of 7% and a supply deficit for 2012.
Svenska Cellulosa Aktiebolaget (OMX: SCA B) added another 4.9% of the shares in leading Chinese tissue company Vinda into its holdings with about 600 million SEK purchase subject to consent from Vinda’s lenders. The seller was a company called Fu An, which is owned by the Chairman of Vinda Li Chao Wang. The transaction was done at a 22% premium on Vinda’s (SEHK: 3331) Tuesday closing price. SCA’s stake following the transaction will be 22.61% while Fu An remains the largest shareholder.
Nordic high beta stock posted ugly numbers with many large cyclical stocks nearing double-digit losses. The gainers were few and far between. Thrane & Thrane (OMXC: THRAN) predictably was among them as Cobham followed up on its recent purchases with a cash offer of DKK 420 for each share.
Norsk Hydro's (OSE: NHY) peer Alcoa kick-started earnings season across the pond with better than expected numbers after market close. The American aluminium company maintained its expectations for global aluminium demand growth of 7% and a supply deficit for 2012.
Svenska Cellulosa Aktiebolaget (OMX: SCA B) added another 4.9% of the shares in leading Chinese tissue company Vinda into its holdings with about 600 million SEK purchase subject to consent from Vinda’s lenders. The seller was a company called Fu An, which is owned by the Chairman of Vinda Li Chao Wang. The transaction was done at a 22% premium on Vinda’s (SEHK: 3331) Tuesday closing price. SCA’s stake following the transaction will be 22.61% while Fu An remains the largest shareholder.
Wednesday, 14 March 2012
Norsk Hydro's Barcerena alumina refinery construction postponed again
The Board of Directors of Companhia de Alumina do Para (CAP) has decided to postpone the planned construction of a new alumina refinery in Barcarena, near city of Belém in the state of Para, Brazil. CAP is owned by Norsk Hydro (OSE:NHY, 81%) and Dubai Aluminium Company Ltd aka. Dubal (19%). Hydro is a majority owner of nearby Paragominas bauxite mine. Its Alunorte alumina refinery is also not far at all.
The main reason for postponement is uncertainty in regards to both aluminium supply and demand and the overall development of the world economy. Two days ago when Hydro spoke of a difficult year for bauxite and alumina, it hinted there is such a possibility as the market risk a situation of oversupply in the next few years.
Hydro says that this decision does not reflect a change in the company’s view for long-term positive prospects in alumina and aluminium market. Hydro is trading near parity for the day. The decision to build the Barcarena refinery was made in 2008 and it was initially scheduled to come online in 2011. The initial planned production capacity has been 1.86 million tonnes per annum on two 930 tonne production lines but further extension are possible. Hydro still views this project as one of the most attractive in industry. It is now slated to start production in 2015.
The main reason for postponement is uncertainty in regards to both aluminium supply and demand and the overall development of the world economy. Two days ago when Hydro spoke of a difficult year for bauxite and alumina, it hinted there is such a possibility as the market risk a situation of oversupply in the next few years.
Hydro says that this decision does not reflect a change in the company’s view for long-term positive prospects in alumina and aluminium market. Hydro is trading near parity for the day. The decision to build the Barcarena refinery was made in 2008 and it was initially scheduled to come online in 2011. The initial planned production capacity has been 1.86 million tonnes per annum on two 930 tonne production lines but further extension are possible. Hydro still views this project as one of the most attractive in industry. It is now slated to start production in 2015.
Sunday, 19 February 2012
Hydro recovers after earnings release
As was mentioned in the beginning of the month, Norsk Hydro (OSE: NHY) took large one-off charges for Q4. The company decided to report earnings in a way that highlighted the underlying numbers (aka excluding the one-off items). These (EBIT: of 1133 million NOK, net income 876 million and EPS of 0.42; with the one-off charges the same numbers were -362 million, -749 million and -0.36) together with positive comments about the future of the industry and maintained growth expectations for aluminium demand in 2012 excluding China helped the stock to recover all of the ground lost earlier this month.
Fourth quarter is normally seasonally weak and metal prices and volumes were down as well. Sales were down 9% seasonally to 21.75 billion. Most of the decline was in Europe. Full-year sales were 91 444 million and in full-year numbers the effect of one-off items was reserves as a 4.3 billion gain from revaluations of Hydro’s previously held assets related to the Vale S.A.'s aluminium business acquisitions pushes up full-year numbers. Full-year underlying EPS is 1.89 NOK where as reported EPS is 3.41 NOK. The Board of Directors suggests a dividend of 0.75 NOK. Weekly close was at 32,51 NOK.
Fourth quarter is normally seasonally weak and metal prices and volumes were down as well. Sales were down 9% seasonally to 21.75 billion. Most of the decline was in Europe. Full-year sales were 91 444 million and in full-year numbers the effect of one-off items was reserves as a 4.3 billion gain from revaluations of Hydro’s previously held assets related to the Vale S.A.'s aluminium business acquisitions pushes up full-year numbers. Full-year underlying EPS is 1.89 NOK where as reported EPS is 3.41 NOK. The Board of Directors suggests a dividend of 0.75 NOK. Weekly close was at 32,51 NOK.
Wednesday, 1 February 2012
Hydro to take big one-off charges in Q4 2011
Norsk Hydro ASA (OSE: NHY) will be taking 1.3 billion of charges in write-downs in its fourth-quarter 2011 accounts. Weakening demand conditions particularly in Southern Europe and low prices combined with pressure on raw material prices and currency effects are to be blamed for this. Hydro says it continues to implement corrective measures to address current imbalances in aluminium markets.
The most significant write-down will be on the asset value of its Kurri Kurri smelter in Austrailia. Hydro recently announced closure of one potline at the plant. Back then it was estimated that the entire production site may be in danger and the latest 1 billion NOK impairment certainly does not improve that sentiment. There were no new comments on the efforts to secure financing for the plant besides a comment that the financial situation is challenging. Remaining book value of Kurri Kurri fixed assets stands at 1.2 billion NOK.
Hydro does not see any near-term improvement in extrusion business operations in Southern Europe. Therefore the company also writes down assets within Building Systems in Spain, Portugal and Italy and also takes a restructuring charge on ongoing measures aimed at reducing costs base by around 300 million NOK by the end of 2012 at these sites. Hydro’s stock has recovered to trade on par with yesterday’s closing. It opened up deep in the red but has been helped by a positive market sentiment so far today. Hydro is due to report its Q4 2011 earnings on February 16th.
The most significant write-down will be on the asset value of its Kurri Kurri smelter in Austrailia. Hydro recently announced closure of one potline at the plant. Back then it was estimated that the entire production site may be in danger and the latest 1 billion NOK impairment certainly does not improve that sentiment. There were no new comments on the efforts to secure financing for the plant besides a comment that the financial situation is challenging. Remaining book value of Kurri Kurri fixed assets stands at 1.2 billion NOK.
Hydro does not see any near-term improvement in extrusion business operations in Southern Europe. Therefore the company also writes down assets within Building Systems in Spain, Portugal and Italy and also takes a restructuring charge on ongoing measures aimed at reducing costs base by around 300 million NOK by the end of 2012 at these sites. Hydro’s stock has recovered to trade on par with yesterday’s closing. It opened up deep in the red but has been helped by a positive market sentiment so far today. Hydro is due to report its Q4 2011 earnings on February 16th.
Wednesday, 25 January 2012
Novo Nordisk tops clean capitalism list
Nordic companies are clearly overrepresented in Corporate Knights 8th annual ranking of the most sustainable companies in the world. Danish pharmaceutical company Novo Nordisk (OMX: NOVO B) was chosen as the most sustainable company by a wide margin. Last year Novo was down in 16th place. It scored particularly well in this study in energy productivity and in CEO vs. average employee compensation.
The idea of the list is to find companies who not only act in the interests of the business but also for the entire planet in doing so. That means that companies fully take social, economic and ecological costs and benefits into account. A situation where a company’s private optimum level of production differs from the social optimum due to externalities is one type of market failure, which is not normally addressed on the corporate level.
Other Nordic companies close to the top are oil producer Statoil ASA (OSE:STL) at number 3 and Danish biotech company Novozymes A/S (OMX: NZYM B) at number four. Aluminium producer Norsk Hydro ASA (OSE: NHY) and Swedish industrial group Atlas Copco (OMX: ATCO A, ATCO B)) round up the top ten.
Below the top ten one can also find Swedish telecom company TeliaSonera (OMX: TLSN, OMXH: TLS1V) at 13, oft-maligned oil refining and marketing company Neste Oil Oyj (OMX: NES1V) from Finland at 19, Danish wind turbine manufacturer Vestas Wind Systems A/S (OMX: VWS) at number 31, Swedish heavy trucks and buses manufacturer Scania AB (OMX: SCV B) at 36, Reverse vending machines firm Tomra Systems ASA (OSE: TOM) at number 39, Finnish retailing conglomerate Kesko Oyj (OMX: KESB) at 43, Norwegian financial services company StoreBrand ASA (OSE: STB) at 54, Swedish retail-clothing giant H & M Hennes & Mauritz AB (STO:HM B) at 67 and Danish medical devices firm Coloplast A/S (OMX: COLO B) on 84th place.
The idea of the list is to find companies who not only act in the interests of the business but also for the entire planet in doing so. That means that companies fully take social, economic and ecological costs and benefits into account. A situation where a company’s private optimum level of production differs from the social optimum due to externalities is one type of market failure, which is not normally addressed on the corporate level.
Other Nordic companies close to the top are oil producer Statoil ASA (OSE:STL) at number 3 and Danish biotech company Novozymes A/S (OMX: NZYM B) at number four. Aluminium producer Norsk Hydro ASA (OSE: NHY) and Swedish industrial group Atlas Copco (OMX: ATCO A, ATCO B)) round up the top ten.
Below the top ten one can also find Swedish telecom company TeliaSonera (OMX: TLSN, OMXH: TLS1V) at 13, oft-maligned oil refining and marketing company Neste Oil Oyj (OMX: NES1V) from Finland at 19, Danish wind turbine manufacturer Vestas Wind Systems A/S (OMX: VWS) at number 31, Swedish heavy trucks and buses manufacturer Scania AB (OMX: SCV B) at 36, Reverse vending machines firm Tomra Systems ASA (OSE: TOM) at number 39, Finnish retailing conglomerate Kesko Oyj (OMX: KESB) at 43, Norwegian financial services company StoreBrand ASA (OSE: STB) at 54, Swedish retail-clothing giant H & M Hennes & Mauritz AB (STO:HM B) at 67 and Danish medical devices firm Coloplast A/S (OMX: COLO B) on 84th place.
Thursday, 12 January 2012
Hydro cuts loom at Kurri Kurri
Norsk Hydro AS (OSE: NHY) has started a consultation process with the local employees on its Kurri Kurri aluminium smelter in Hunter Valley, New South Wales, Australia for possible production curtailments. Kurri Kurri plant has three production lines with a total production capacity of 180,000 tonnes per annum. Local media says that at the moment an estimated 50-150 jobs may be at risk, with the apparent closure of one production line. According to an earlier miningaustralia.com.au report, workers had refused to delay a pay rise for one year.
Hydro's stock had performed well after a better than expected report from Alcoa had raised hopes for improving business conditions. However, in the current press release Hydro says that the negotiations have been started due to low aluminium prices and uncertain market prospect due to macroeconomic uncertainty.
Additionally the strength showed by the Aussie Dollar against USD makes Kurri Kurri plant less competitive in the current situation. The small and aging smelter has also been struggling to secure a new electricity contract and other manufacturers in the region have also been downsizing production. Unless market conditions improve significantly, the entire production plant may go under the hammer.
Hydro's stock had performed well after a better than expected report from Alcoa had raised hopes for improving business conditions. However, in the current press release Hydro says that the negotiations have been started due to low aluminium prices and uncertain market prospect due to macroeconomic uncertainty.
Additionally the strength showed by the Aussie Dollar against USD makes Kurri Kurri plant less competitive in the current situation. The small and aging smelter has also been struggling to secure a new electricity contract and other manufacturers in the region have also been downsizing production. Unless market conditions improve significantly, the entire production plant may go under the hammer.
Saturday, 7 January 2012
Oil spill in Sogn og Fjordane county
According to the The Norwegian News Agency Norsk Telegrambyrå, there has been an oil spill from Norske Hydro's (OSE: NHY) aluminum plant Hydro Aluminium Årdal Karbon. Large waves caused by hurricane Dagmar on Boxing Day had caused damage that led to the spill. Hydro has just now learned the amount of oil that was leaked and the total stands near 7000 liters. The oil in question is high temperature, liquid phase heat transfer fluid called Therminol 66, which can linger in the marine life for a long time. Bergens Tidende writes that Norwegian Institute for Water Research (NIVA) has been called to the scene for impact assessment.
Tuesday, 26 July 2011
Norsk Hydro Q2 of 2011 details
Norwegian based global aluminium supplier Norsk Hydro (OSE: NHY) opened above 40 NOK per share level after the company reported quarterly numbers that were considerably above estimates. Underlying earnings before financial items and tax of (EBIT) was 1.906 billion Norwegian kroner generated from second quarter revenue of 24.7 billion. Underlying earnings per share were 61 øre per share.
Bauxite & Alumina business unit improved production performance. The integration of Vale’s bauxite & aluminina activities is on track. Hydro’s interest expenses grew as a result of debt assumed in the Vale transaction and Hydro also took on price hedges for the transaction, which offset some of gains from the realized higher alumina prices on the market. The unit’s contribution to EBIT was 272 million, up from 155 million in Q1
Primary Metal unit’s result also improved as a result of higher aluminium prices and higher volumes. These were not fully offset by higher raw material costs. Qatalum plant is expected to reach full production by the end of third quarter. Primary metals contribution to underlying EBIT was 765 million.
Midstream operations volumes and margins were up and downstream EBIT was stable. Energy unit activity was at a lower level compared to Q1 due to seasonally lower power production and lower prices but underlying result was strong. Hydro has agreed to divest non-strategic 20% ownership stake in northern Norwegian power production company SKS Produksjon AS for NOK 1 billion in cash to Salten Kraftsamband AS
CEO Svein Richard Brandtzæg said the company continues to focus on cost repositioning along aluminium value chain. He says the company remains optimistic about the prospects of aluminium demands but concedes that more volatile macro environment may result in increased demand fluctuations in the coming months. Hydro is guiding improved production stability, increased production and raw material cost pressure. Hydro has 180 000 mt aluminium hedged for H2 at LME ~USD 2 400 per mt.
Bauxite & Alumina business unit improved production performance. The integration of Vale’s bauxite & aluminina activities is on track. Hydro’s interest expenses grew as a result of debt assumed in the Vale transaction and Hydro also took on price hedges for the transaction, which offset some of gains from the realized higher alumina prices on the market. The unit’s contribution to EBIT was 272 million, up from 155 million in Q1
Primary Metal unit’s result also improved as a result of higher aluminium prices and higher volumes. These were not fully offset by higher raw material costs. Qatalum plant is expected to reach full production by the end of third quarter. Primary metals contribution to underlying EBIT was 765 million.
Midstream operations volumes and margins were up and downstream EBIT was stable. Energy unit activity was at a lower level compared to Q1 due to seasonally lower power production and lower prices but underlying result was strong. Hydro has agreed to divest non-strategic 20% ownership stake in northern Norwegian power production company SKS Produksjon AS for NOK 1 billion in cash to Salten Kraftsamband AS
CEO Svein Richard Brandtzæg said the company continues to focus on cost repositioning along aluminium value chain. He says the company remains optimistic about the prospects of aluminium demands but concedes that more volatile macro environment may result in increased demand fluctuations in the coming months. Hydro is guiding improved production stability, increased production and raw material cost pressure. Hydro has 180 000 mt aluminium hedged for H2 at LME ~USD 2 400 per mt.
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