• Underlying EBIT of NOK 2,446 million
• Negative result effects from raw material costs and USD depreciation
• Weak Rolled Products results on continued operational issues and negative currency effect
• Acquisition of Sapa completed on October 2, integration progressing according to plan
• Better improvement program on track for 2019 target of NOK 2.9 billion, despite 2017 setback
• Karmøy Technology Pilot on time and budget, expected start-up Q4 2017
• Positive market sentiment on announced Chinese closures, global market expected largely balanced in 2017

"We have lifted our global demand estimate for 2017 to 5-6%, indicating a continued strong demand for aluminium. There is a positive market sentiment for aluminium, mainly driven by curtailments of primary production in China, which have supported the market balance in the quarter," says President and CEO Svein Richard Brandtzæg.

"This quarter marks a new chapter in our history, adding Extruded Solutions as a fifth business area in Hydro. We are now 35,000-people strong, with 150 sites all over the world and 30,000 customers throughout the entire value chain of aluminium. We have a global reach as well as being very close to our customers and all the communities we serve," says Brandtzæg.

"We now have the best-possible platform for further growth and opportunities, innovation and product development," says Brandtzæg.

Underlying EBIT for Bauxite & Alumina decreased compared to the second quarter. Higher bauxite and caustic prices, negative currency effects and increased depreciation, primarily in Paragominas, were partly offset by improved consumption factors. The ongoing ramp-up process of the new press filter operation caused additional cost at the alumina refinery.

Underlying EBIT for Primary Metal declined in the third quarter due to negative currency effects, as the NOK strengthened against the USD, in addition to seasonally lower volumes and higher carbon costs. This was partly offset by lower alumina and fixed costs.

Underlying EBIT for Metal Markets declined in the third quarter, mainly due to negative inventory valuation and less positive currency effects. Results from remelters declined in the third quarter driven by lower sales volumes in Europe.

Underlying EBIT for Rolled Products in the third quarter improved slightly compared to the second quarter of 2017. The increase was primarily due to an accrual for employee compensation recognized in the second quarter. This was partly offset by negative currency developments and seasonal effects including summer shutdown in certain plants. The Neuss smelter result was on same level compared to prior quarter.

Underlying EBIT for Energy increased compared to the previous quarter, mainly due to improved commercial results and higher production, partly offset by periodically higher property tax.

Underlying EBIT for Sapa decreased compared to the previous quarter, in line with general seasonality in the extrusion business.

Due to the ongoing performance challenges in Rolled Products, progress on Hydro's "Better" improvement program is behind plan. While Hydro does not expect to reach the year end target of NOK 500 million, the delay is not expected to impact the ability to reach the 2019 target of NOK 2.9 billion.

Hydro's net cash position increased by NOK 1.7 billion to NOK 7.7 billion at the end of the quarter. Net cash provided by operating activities amounted to NOK 3.0 billion. Net cash used in investment activities, excluding short term investments, amounted to NOK 1.3 billion.

Reported earnings before financial items and tax amounted to NOK 2,323 million for the third quarter. In addition to the factors discussed above, reported EBIT included net unrealized derivative gains of NOK 23 million and negative metal effects of NOK 151 million.

Net income amounted to NOK 2,184 million in the third quarter including a reduction in tax expense and related interest income of NOK 125 million in total following a closed tax case in September 2017. Net income also includes net foreign exchange gains of NOK 520 million, mainly unrealized, reflecting a weakening of USD against BRL affecting US dollar debt in Brazil, while the weakening of EUR forward rates against NOK resulted in an unrealized gain on the embedded derivatives in power contracts denominated in EUR.

Cautionary note
Certain statements included in this announcement contain forward-looking information, including, without limitation, information relating to (a) forecasts, projections and estimates, (b) statements of Hydro management concerning plans, objectives and strategies, such as planned expansions, investments, divestments, curtailments or other projects, (c) targeted production volumes and costs, capacities or rates, start-up costs, cost reductions and profit objectives, (d) various expectations about future developments in Hydro’s markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, and (i) qualified statements such as “expected”, “scheduled”, “targeted”, “planned”, “proposed”, “intended” or similar.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include, but are not limited to: our continued ability to reposition and restructure our upstream and downstream businesses; changes in availability and cost of energy and raw materials; global supply and demand for aluminium and aluminium products; world economic growth, including rates of inflation and industrial production; changes in the relative value of currencies and the value of commodity contracts; trends in Hydro’s key markets and competition; and legislative, regulatory and political factors.

No assurance can be given that such expectations will prove to have been correct.  Hydro disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.