Norsk Hydro ASA — Earnings Release 2014

Oct 22, 2014

Norsk Hydro : Third quarter 2014: Lower Alunorte costs and higher all-in metal price lift results

Norsk Hydro : Third quarter 2014: Lower Alunorte costs and higher all-in metal price lift results

Norsk Hydro ASA's underlying earnings before financial items and tax (EBIT) rose

to NOK 1,490 million in the third quarter from NOK 544 million in the second

quarter. Results are backed by lower costs at the Alunorte alumina refinery,

higher all-in metal prices and higher alumina prices.

* Underlying EBIT NOK 1,490 million

* Higher realized all-in metal and alumina prices

* Lower operating costs at Alunorte

* Expected 3-4 percent demand growth for primary aluminium World ex-China

* World ex-China primary aluminium demand continues to exceed production

"All-in metal prices continued to rise in the quarter, reflecting the tighter

market we saw in last quarter and the continuing market balance deficit," said

President and CEO Svein Richard Brandtzæg. "Demand for aluminium is rising, and

we now see demand growth of 3-4 percent in the world ex-China for 2014, helped

by metal substitution in the automotive market."

Underlying EBIT for Bauxite & Alumina improved significantly in the third

quarter reflecting higher realized alumina prices and lower operating costs at

Alunorte, in Brazil. Realized alumina prices, however, were negatively impacted

by a lower share of alumina sales at index prices.

"I am pleased to see the 'From B to A' improvement program progressing according

to plan and that improvement efforts in Bauxite & Alumina are showing bottom

line results. Operating costs at Alunorte are going down and we have the

momentum to reach our targets," said Brandtzæg.

Underlying EBIT for Primary Metal improved substantially in the third quarter

influenced by higher realized aluminium prices and increased product premiums.

Positive developments were partly offset by higher raw material costs and

seasonally lower sales volumes.

Metal Markets delivered higher underlying EBIT compared to the previous quarter

influenced by improved results from sourcing and trading activities and positive

ingot inventory valuation effects.

Underlying EBIT for Rolled Products was significantly higher compared with the

second quarter of 2014 mainly due to positive contributions from the Rheinwerk

smelter, in Germany, reflecting higher all-in metal prices. Margin pressure

increased but was partly offset by seasonally lower operating costs. Volumes

were stable.

Compared to the second quarter, underlying EBIT for Energy increased, mainly due

to higher hydropower prices in our production areas and lower area price

differences.

Underlying EBIT for Sapa declined compared to the second quarter, partly

influenced by seasonally lower sales volumes in Europe.

Operating cash flow amounted to NOK 1.1 billion for the third quarter including

increased working capital of NOK 0.9 billion. Net cash used for investment

activities amounted to NOK 0.9 billion. Hydro's net debt position amounted to

NOK 2.1 billion at the end of the third quarter.

Reported earnings before financial items and tax amounted to NOK 1,937 million

in the third quarter. In addition to the factors discussed above, reported EBIT

included net unrealized derivative gains and positive metal effects of NOK 476

million in total. Reported earnings also included other charges of NOK 30

million.

In the previous quarter reported earnings before financial items and tax

amounted to NOK 620 million including net unrealized derivative gains and

positive metal effects of NOK 154 million in total. Reported earnings also

included charges of NOK 87 million (Hydro's share) in Sapa primarily related to

rationalization activities.

Income from continuing operations amounted to NOK 665 million in the third

quarter including a net foreign exchange loss of NOK 1,001 million. In the

previous quarter, income from continuing operations amounted to NOK 269 million

including a net foreign exchange loss of NOK 101 million.

Key financial

information

%change First First

NOK million, Third Second %change Third prior 9 9

except per quarter quarter prior quarter year months months Year

share data 2014 2014 quarter 2013 quarter 2014 2013 2013

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Revenue 19 698 18 272 8 % 16 145 22 % 56 251 48 306 64 877

Earnings

before

financial

items and tax

(EBIT) 1 937 620 >100 % 596 >100 % 3 379 1 677 1 663

Items

excluded from

underlying >(100)

EBIT (447) (75) >(100) % 62 % (573) 577 1 063

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Underlying

EBIT 1 490 544 >100 % 658 >100 % 2 806 2 254 2 725

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Underlying

EBIT :

Bauxite & (1

Alumina (26) (269) 90 % (370) 93 % (583) (678) 057)

Primary Metal 1 216 420 >100 % 337 >100 % 1 948 938 1 422

Metal Markets 171 100 72 % 111 54 % 412 404 594

Rolled

Products 243 177 37 % 181 34 % 601 515 615

Energy 234 169 39 % 485 (52) % 838 1 270 1 653

Other and >(100)

eliminations (349) (52) >(100) % (87) % (409) (195) (502)

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Underlying

EBIT 1 490 544 >100 % 658 >100 % 2 806 2 254 2 725

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Underlying

EBITDA 2 615 1 653 58 % 1 801 45 % 6 129 5 687 7 306

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Underlying

income (loss)

from

discontinued

operations - - - 57 (100) % - 220 220

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Net income

(loss) 665 269 >100 % 321 >100 % 1 396 (81) (839)

Underlying

net income

(loss) 1 043 318 >100 % 393 >100 % 1 748 1 470 1 610

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Earnings per

share 0.29 0.09 >100 % 0.11 >100 % 0.57 (0.06) (0.45)

Underlying

earnings per

share 0.43 0.13 >100 % 0.14 >100 % 0.72 0.63 0.65

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Financial

data:

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Investments 889 740 20 % 975 (9) % 2 176 2 704 3 761

Adjusted net

interest- (14 (10 (10

bearing debt (14 061) (13 551) (4) % (10 732) (31) % 061) 732) 128)

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Key

Operational

information

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Alumina

production

(kmt) 1 478 1 526 (3) % 1 316 12 % 4 432 3 925 5 377

Primary

aluminium

production

(kmt) 487 488   - 491 (1) % 1 459 1 452 1 944

Realized

aluminium

price LME

(USD/mt)   1 906   1 762 8 %   1 822 5 % 1 803 1 932 1 902

Realized

aluminium

price LME

(NOK/mt)   11 909   10 660 12 %   10 938 9 % 11 075 11 233 11 160

Realized

NOK/USD

exchange rate 6.25 6.05 3 % 6.00 4 % 6.14 5.81 5.87

Metal

products

sales, total

Hydro (kmt)   811   843 (4) %   792 2 % 2 525 2 387 3 164

Rolled

Products

sales volumes

to external

market (kmt) 244 245    - 234 5 % 732 715 941

Power

production

(GWh) 2 170 2 248 (3) % 2 838 (24) % 7 382 7 831 10 243

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Investor contact

Contact Pål Kildemo

Cellular +47 97096711

E-mail Pal.Kildemo@hydro.com

Press contact

Contact Halvor Molland

Cellular +47 92979797

E-mail Halvor.Molland@hydro.com

Certain statements included within this announcement contain forward-looking

information, including, without limitation, those relating to (a) forecasts,

projections and estimates, (b) statements of management's plans, objectives and

strategies for Hydro, such as planned expansions, investments 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, as well as (i) statements preceded by "expected", "scheduled",

"targeted", "planned", "proposed", "intended" or similar statements.

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 aluminium business; 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 of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1864557]