3rd Quarter Results

 

Norsk Hydro's net income in the third quarter of 2002 was NOK 513 million (NOK 2.00 per share), compared to NOK 1,333 million (NOK 5.20 per share) in the third quarter of 2001. Operating income in the third quarter of 2002 was NOK 3,945 million compared to NOK 4,741 million for the corresponding period of the prior year.

 

The decline in net income was principally due to higher expensing of exploration costs. In the third quarter of 2002 exploration costs amounted to approximately NOK 1.3 billion (NOK 295 million) of which a little over NOK 1.1 billion is connected to activities outside of Norway. Earnings in all of Hydro's business areas were negatively impacted by the strengthening of the Norwegian kroner and weakening of the US dollar. Earnings were positively affected by higher oil prices and increased oil and gas production. However, the positive factors were largely offset by currency translation effects of oil and gas prices when measured in Norwegian kroner. Hydro Agri maintained good earnings in spite of the continued lower fertilizer prices. Hydro Aluminium's results were negatively influenced by difficult market conditions.

 

Hydro's net income for the first three quarters of 2002 was NOK 5,485 million (21.30 per share), compared to NOK 6,748 million (26.10 per share) for the corresponding period of previous year.

We can be pleased about the production growth in oil and gas, but the results of our international exploration activities are disappointing. Earnings have been negatively impacted by the weak markets in our aluminium activities. The integration and improvement program in Aluminium is being carried out according to our plans and will be reinforced to help make earnings more robust during difficult market conditions. The positive developments in Hydro Agri continue, especially the growth outside of Europe remained strong in the quarter. I am satisfied that we have restored our strong financial position so soon after our acquisition of VAW and the SDFI assets. Moving forward we expect that oil and gas production will continue to develop positively. There continues to be great uncertainty related to the market development for our industrial products, especially aluminium," says President and CEO, Eivind Reiten.

 

Operating income for Oil and Energy was NOK 3,170 million for the third quarter of 2002, compared with NOK 4,622 million in the corresponding period of the prior year. Hydro's production of oil and gas in the third quarter of 2002 averaged 452,000 barrels of oil equivalents per day (boed), an increase of 33,000 boed compared to the third quarter of 2001. Hydro anticipates that its oil and gas production for the fourth quarter of 2002 will be approximately 500,000 boed, and therefore, has revised its 2002 average production target to 470,000 boed.

 

Operating income for Aluminium for the third quarter of 2002 was NOK 412 million, and has been affected by the weaker markets for processed products and a continued decline of metal prices in the third quarter of 2002.

 

Operating income for Agri for the third quarter of 2002 was NOK 436 million, compared with NOK 207 million in the third quarter of 2001. The result was negatively influenced by continued low international fertilizer prices. However, further reductions in fixed costs and increased sales volumes outside Europe made a positive contribution.

 

The provision for current and deferred taxes for the third quarter of 2002 amounted to NOK 2,701 million, approximately 85 percent of income before tax. The unusually high rate of taxation for the quarter is due primarily to a combination of high exploration costs outside of Norway, and the high marginal tax rate on earnings from oil and gas operations on the Norwegian Continental Shelf, which accounted for a considerable portion of Hydro's income before tax.

 

 

Third quarter 2002		Non-cons. inv.,
	Operating	Interest &	Other	Depreciation
NOK million	income (loss)	selected fin.items	income	and amortization	EBITDA
Hydro Oil and Energy	3170	71	-	2210	5451
Hydro Aluminium	412	(372)	-	787	827
Hydro Agri	436	(6)	-	289	719
Other Activities	19	(58)	-	404	365
Corporate and Eliminations	(92)	219	-	1	128
Total	3945	(146)	-	3691	7490

 

 

 

 

01.01-30.09. 2002		Non-cons. inv.,
	Operating	Interest &	Other	Depreciation
NOK million	income (loss)	selected fin.items	income	and amortization	EBITDA
Hydro Oil and Energy	10563	172	77	6641	17453
Hydro Aluminium	1468	(475)	-	2025	3018
Hydro Agri	1998	170	166	966	3300
Other Activities	(7)	(147)	-	865	711
Corporate and Eliminations	(177)	913	(24)	9	721
Total	13845	633	219	10506	25203

 

Further information about Norsk Hydro ASA and the company's third quarter results are available on the Internet: www.hydro.com

 

Certain statements in this press release are or may constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not in the nature of historical facts may be deemed to be forward-looking statements and may contain identifying words such as "believes", "anticipates", "plans", "expects" and similar expressions. These forward looking statements are based on Hydro's current expectations, assumptions, estimates and projections about the company and the industries in which it engages in business. All forward-looking statements involve risks and uncertainties. For a detailed description of factors that could cause Hydro's actual results to differ materially from those expressed in or implied by such statements, please refer to its annual report on Form 20-F for the year-ended December 31, 2001 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission.