Norsk Hydro swings to profit in Q2

Norwegian aluminum producer Norsk Hydro reported net income of 269mn kroner (US$47.8mn) in the second quarter compared to a loss of 665mn kroner a year earlier.

Revenue in Q2 rose 14% to 18.3bn kroner from 16.1bn kroner. Lower power production and prices were partially offset by improved results from primary metal, according to the company's earnings release.

"Aluminum demand continues to exceed production resulting in a tight market, and we see the all-in metal prices at their highest levels since 2012," said CEO Svein Richard Brandtzæg, who is set to leave Hydro in February to head fellow Norwegian fertilizer company Yara International.

Hydro's alumina refinery Alunorte in Brazil has been subject to ICMS taxation on fuel oil since February 1, resulting in additional costs of roughly 150mn kroner per quarter.

In addition, Alunorte and the Albras aluminum smelter entered into USD currency forward contracts in Brazil for the second half 2013 and all of 2014. The remaining program value at the end-June amounted to roughly US$440mn, the release said.

"I am happy to see production at record high levels above 6Mt annualized at the Alunorte alumina refinery in Brazil, but regretfully results are still weak," said Brandtzæg.

The company is forecasting global demand for primary aluminum to grow 2-4% this year.

In the region, Norsk Hydro also has operations in Argentina, Jamaica, Mexico, Trinidad and Tobago, and Venezuela.