Norsk Hydro reports loss in Q3 on higher charges

AP News
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Posted: Oct 27, 2010 7:29 AM
Norsk Hydro reports loss in Q3 on higher charges

Norwegian aluminum producer Norsk Hydro ASA on Wednesday reported a loss in the third quarter, mainly blaming write-downs on investment as well as charges related to its Qatalum joint venture.

The Oslo-headquartered group saw its share slip around 2 percent to 36.58 kroner ($6.27) exchange after reporting a quarterly net loss of 104 million kroner ($17.7 million). In the same three months last year it posted a profit of just over 1 billion kroner, and reported lower losses on derivatives investments and one-time accounting gains.

The Qatalum aluminum plant, Norsk Hydro's joint venture with Qatar Petroleum, also incurred higher losses in the current quarter, partly due to a power shortage in August. Norsk Hydro CEO Svein Richard Brandtzaeg said he expects the plant to be running at full capacity at the end of the first quarter next year.

Net revenues in the quarter, however, rose 10 percent to 18.4 billion from a year earlier, when demand was pinched by the credit crunch.

Brandtzaeg said that market fundamentals seem to be recovering, and that thanks to higher-than-expected demand for aluminum so far this year, Hydro expects "growth in demand outside China at about 17 percent in 2010 compared with 2009."

He also added that "firm cost control will continue to drive Hydro's operational performance, and I am pleased to see that the work to cut costs in our smelter system is moving along toward the target of $300 per ton aluminum."

Brandtzaeg said the company expects to close its deal to buy the majority of Brazilian mining company Vale S.A.'s aluminum operations in the fourth quarter.