"In our first year as a fully integrated and truly global aluminium company, we showed encouraging progress in designing, developing and delivering aluminium products and solutions worldwide. But 2018 was also heavily affected by the production embargo at our alumina refinery Alunorte in Brazil", President and CEO Svein Richard Brandtzæg writes in his letter to shareholders.
"2018 was the year our new business area Extruded Solutions was financially and operationally fully integrated in our now 36,000-strong Hydro family. It has added competence, assets and customers in key downstream segments across all continents, in line with our ambition to become a better, bigger and greener company", Brandtzæg says.
"The Karmøy technology pilot has been ramped up to produce the world's most climate and energy-efficient primary aluminium, we have decided to upgrade the Husnes plant, delivered better results from remelters, secured future renewable power sourcing, invested in selective downstream projects such as extrusion capacity for the US automotive market and improved performance at the new automotive line in Germany", Brandtzæg continues.
"At the same time, 2018 stands out as the most demanding year for me as president and CEO of Hydro. We have learned from the Alunorte situation - both with regards to our operational activities inside the fence of Alunorte, as well as how local communities surrounding our operations regard us as a neighbor. Through dialog with our local communities, we realize that we had not lived up to their expectations or our own ambitions. Hydro can only succeed as a company if the societies around us are viable", Brandtzæg says.
"The curtailment at Alunorte has weakened our financial results and progress of our improvement program. In addition, different tariffs and sanctions have influenced global markets and trade flows over the past year, also affecting our industry. But as the metal of the future continues to find its way into new applications, demand growth remains firm and future prospects look promising. More and more of our aluminium is used automotive applications, light-weighting transportation and reducing carbon emissions in the user phase", Brandtzæg says.
"Being engaged in the entire aluminium value chain provides advantages that are unmatched by our global peers. By tracking each step along the way, we are able to document and be transparent about our sustainability practices. As part of taking responsibility, and to contribute to sustainable development, we have taken part in developing the standards of the Aluminium Stewardship Initiative. The first Hydro plants have already received certification, and we are on track with our plan to achieve certification along the entire aluminium value chain from mine to recycling in the coming months", Brandtzæg says.
"If the global climate challenge is our biggest challenge, technological advancement is our greatest opportunity. We are pushing the laws of nature to achieve more energy-efficient electrolysis. We utilize digitalization, big data and artificial intelligence to optimize and automate processes. We tailor-make specific aluminium properties on the atomic level to innovate new products and solutions that reduces emissions in the user phase", Brandtzæg says.
"In short, by bringing to life the unique qualities of aluminium, we address both the greatest threat and opportunity of our time", Brandtzæg ends.
The audited and Board of Directors' approved financial statements for 2018 have been changed from the Q4 results published on February 7, 2019. A charge of NOK 157 million has been included related to Hydro Extrusion Portland, Inc (formerly Sapa Profiles, Inc, (SPI)), Hydro Extrusion USA, LLC and the United States Department of Justice reaching an agreement in principle on investigations regarding aluminum extrusions that SPI manufactured from 1996 to 2015.
Hydro's reported net income for 2018 following the adjustment is NOK 4 323 million and reported EPS is 2.08.
The report, meeting the Norwegian statutory requirements for annual reporting, is "Financial Statements and Board of Directors' Report - 2018." This report is available in Norwegian and English.
In addition, a more extensive report is available, "Annual Report - 2018," with detailed information about Hydro's businesses, operational performance, financial performance, viability performance, corporate governance, environmental, social and financial statements. The report is available in English.
Content from the two reports can be found at www.hydro.com/reporting2018. All parts of the reports can be downloaded from this web site and printed in PDF format on demand.
Hydro's main reporting on viability performance is included in the "Annual Report - 2018," with additional details on www.hydro.com/reporting2018
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, ivestments, 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.
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act
Source: Norsk Hydro