Norsk Hydro ASA — Earnings Release 2014

Jul 22, 2014

Norsk Hydro: Second quarter 2014: All-in metal price rise continues, seasonally lower Energy results

Norsk Hydro: Second quarter 2014: All-in metal price rise continues, seasonally lower Energy results

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

declined to NOK 544 million in the second quarter from NOK 772 million in the

first quarter. Seasonally lower power production and prices weighed on

underlying results, partly offset by higher all-in metal prices and improved

results in Primary Metal.

* Underlying EBIT NOK 544 million

* Higher all-in aluminium and realized alumina prices

* Alunorte production at record-high levels

* Seasonally lower power production and prices

* World outside China primary aluminium demand continues to exceed production

* Signed agreement to take over Søral primary plant

"Aluminium demand continues to exceed production resulting in a tight market,

and we see the all-in metal prices at their highest levels since 2012. We are

continuing our efforts to improve along the entire value chain, and Qatalum has

now achieved a cost position among the 10 best aluminium plants in the world,"

said President and CEO Svein Richard Brandtzæg.

Underlying EBIT for Bauxite & Alumina remained weak, but improved somewhat

compared to first quarter of 2014 influenced by higher realized alumina prices

and increased alumina sales volumes. Positive developments were mostly offset by

negative currency developments and higher energy costs due to ICMS taxes for the

full quarter.

"I am happy to see production at record-high levels above 6 million tons

annualized at the Alunorte alumina refinery in Brazil, but regretfully results

are still weak. However, our "From B to A" improvement program is on track, and

the results should start impacting the bottom-line in the coming quarters," said

Brandtzæg.

Underlying EBIT for Primary Metal improved in the second quarter influenced by

higher product premiums, partly offset by lower sales volumes and somewhat lower

realized aluminium prices.

Metal Markets delivered a lower underlying EBIT compared to the previous quarter

mainly due to decreased results from sourcing and trading activities partly

offset by higher volumes at remelters.

"It has been an eventful quarter: We signed an agreement to take over the Søral

primary plant and its products fit well with Hydro's high premium casthouse

strategy. We signed four power contracts, securing parts of our external power

sourcing need after 2020. Also, Enova granted Hydro support to build the world's

most energy efficient aluminium pilot. This is an important step for Hydro's

ambition to become carbon neutral by 2020 and a pillar in our strategy to

develop the hydropower-based Norwegian aluminium portfolio," said Brandtzæg.

Underlying EBIT for Rolled Products was stable compared to the first quarter.

Compared to the first quarter of 2014, underlying EBIT for Energy declined

mainly due to seasonally lower power production and lower prices in our

production areas.

Underlying results for Sapa improved during the quarter, partly influenced by

seasonally stronger sales volumes.

Operating cash flow amounted to NOK 1.0 billion for the second quarter including

roughly NOK 0.5 billion of dividends from Qatalum. Net cash used for investment

activities amounted to NOK 0.7 billion. Dividends paid during the quarter

amounted to NOK 1.6 billion. Hydro's net debt position amounted to around NOK

1.9 billion at the end of the second quarter.

Reported earnings before financial items and tax amounted to NOK 620 million in

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

included 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.

In the previous quarter reported earnings before financial items and tax

amounted to NOK 822 million including net unrealized derivative gains amounting

to NOK 170 million in total. Reported earnings also included impairment charges

of NOK 33 million related to the divestment of Hydro's casthouse in Hannover and

charges of NOK 86 million (Hydro's share) in Sapa primarily related to

rationalization activities.

Income from continuing operations amounted to NOK 269 million in the second

quarter including a net foreign exchange loss of NOK 101 million. In the

previous quarter, income from continuing operations amounted to NOK 462 million

including a net foreign exchange gain of NOK 193 million.

Key

financial

information

NOK million, Second First %change %change First

except per quarter quarter prior Second quarter prior year half First  Year

share data 2014 2014 quarter 2013 quarter 2014 half 2013 2013

--------------------------------------------------------------------------------------------------------

Revenue 18 272 18 282 - 16 052 14 % 36 553 32 161 64 877

Earnings

before

financial

items and

tax (EBIT) 620 822 (25) % 376 65 % 1 442 1 081 1 663

Items

excluded

from

underlying

EBIT (75) (50) (49) % 144 >(100) % (126) 516 1 063

--------------------------------------------------------------------------------------------------------

Underlying

EBIT 544 772 (29) % 520 5 % 1 316 1 596 2 725

--------------------------------------------------------------------------------------------------------

Underlying

EBIT :

Bauxite &

Alumina (269) (288) 7 % (244) (10) % (557) (308) (1 057)

Primary

Metal 420 312 35 % 237 77 % 732 602 1 422

Metal

Markets 100 141 (30) % 147 (32) % 241 292 594

Rolled

Products 177 181 (2) % 183 (3) % 358 334 615

Energy 169 435 (61) % 268 (37) % 603 784 1 653

Other and

eliminations (52) (8) >(100) % (70) 26 % (61) (109) (502)

--------------------------------------------------------------------------------------------------------

Underlying

EBIT 544 772 (29) % 520 5 % 1 316 1 596 2 725

--------------------------------------------------------------------------------------------------------

Underlying

EBITDA 1 653 1 861 (11) % 1 674 (1) % 3 514 3 886 7 306

--------------------------------------------------------------------------------------------------------

Underlying

income

(loss) from

discontinued

operations - - - 112 (100) % - 163 220

--------------------------------------------------------------------------------------------------------

Net income

(loss) 269 462 (42) % (665) >100 % 730 (402) (839)

Underlying

net income

(loss) 318 388 (18) % 427 (26) % 705 1 075 1 610

--------------------------------------------------------------------------------------------------------

Earnings per

share 0.09 0.19 (53) % (0.31) >100 % 0.28 (0.17) (0.45)

Underlying

earnings per

share 0.13 0.16 (21) % 0.19 (33) % 0.29 0.49 0.65

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Financial

data:

--------------------------------------------------------------------------------------------------------

Investments 740 546 36 % 652 14 % 1 286 1 729 3 761

Adjusted net

interest- (13

bearing debt 551) (11 230) (21) % (11 857) (14) % (13 551) (11 857) (10 128)

--------------------------------------------------------------------------------------------------------

Key

Operational

information

--------------------------------------------------------------------------------------------------------

Alumina

production

(kmt) 1 526 1  428 7 % 1 248 22 % 2 954 2 609 5 377

Primary

aluminium

production

(kmt) 488 484 1 % 483 1 % 972 961 1 944

Realized

aluminium

price LME

(USD/mt) 1 762 1 749 1 %     1 926 (9) % 1 755 1 986 1 902

Realized

aluminium

price LME

(NOK/mt) 10 660 10 702 -      11 217 (5) % 10 682 11 378 11 160

Realized

NOK/USD

exchange

rate 6.05 6.12 (1) % 5.82 4 % 6.09 5.73 5.87

Metal

products

sales, total

Hydro (kmt) 843 871 (3) % 789 7 % 1 714   1 595 3 164

Rolled

Products

sales

volumes to

external

market (kmt) 245 243 1 % 245 - 488 482 941

Power

production

(GWh) 2 248 2 964 (24) % 2 090 8 % 5 212 4 993 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#1832530]