12 Feb 2014
Underlying operating profit NOK 483 mln vs fcast 310 mln
Offers dividend of NOK 0.75 per share, as expected
Says market remains uncertain but is more upbeat on 2014
OSLO, Feb 12 (Reuters) - Norsk Hydro, one of the world's largest producers of aluminium, reported core earnings well above forecasts on Wednesday due to cost cuts and offered a dividend for 2013 in line with expectations.
The price of aluminium - used in the aerospace, construction and automotive sectors - has nearly halved since 2008 due to a massive global surplus of the metal, forcing loss-making firms to slash capacity and make savings.
Norsk Hydro was no exception and had to make several rounds of cost savings throughout its divisions.
"Extensive improvement programmes backed our results for 2013, despite market uncertainty and low aluminium prices," Chief Executive Svein Richard Brandtzaeg said in a statement.
"Although the uncertainty remains, we are entering 2014 on a positive note, as we expect demand for aluminium to slightly exceed production this year, in the world outside China."
Hydro reiterated that it saw world demand outside China growing by 2-4 percent in 2014.
Underlying operating profit rose to 483 million crowns ($79.02 million) for the fourth quarter from 138 million a year ago, beating expectations for 310 million in a Reuters poll.
Norsk Hydro fared better than some of its peers. The United States' biggest producer, Alcoa, reported a big loss for the fourth quarter due to falling aluminium prices earlier this year.
MINING and trading group
Glencore Xstrata yesterday beat analysts' forecasts with a 26 per cent rise in annual copper output, boosted by strong growth at its African and Chilean mines.
Output of both copper and coal, the two biggest earners for
Glencore's industrial side, rose in the year to the end of December, offsetting a decline in nickel, lead and zinc.
The company, which of the diversified miners has the biggest exposure to copper, said its ownsourced copper production rose by more than a quarter to 1.5m tonnes in 2013, passing analysts' expectations for a rise of 16 to 25 per cent.
The division, which accounts for about 30 per cent of the company's profits, benefited from strong growth at its Congolese mines and at Collahuasi in
Chile , a joint venture with rival Anglo American inherited with the acquisition of Xstrata last year.
"Copper is central to our bullish stance on
Glencore Xstrata given our positive view on the future price development of the commodity and the strong prospects for Glencore to grow production," Bernstein research analysts said in a note. - Kitco