Hydro reports record alumina production in Alunorte refinery in Q3

Norsk Hydro has reported its third quarter 2016 results. Though, Hydro's underlying EBIT declined to NOK 1,477 million in Q3 from NOK 1,618 million in Q2 2016, the quarter was brightened up by record-high alumina production of 6.5 million mt.

Commenting on the positive alumina production, President and CEO Svein Richard Brandtzæg said, "I'm pleased to see the positive operational development in our bauxite and alumina production. Both Paragominas and Alunorte produced above nameplate capacity in the third quarter, with Hydro Alunorte alumina production reaching a record-high production level. This is a demonstration of long-term dedication by a highly competent and committed organization in Brazil. We have succeeded in lifting the bar and will continue these efforts to stabilize production at or above nameplate capacity."

Underlying EBIT for Bauxite & Alumina declined compared to Q2. Though the realized alumina price remained stable in Q3, alumina sourcing costs increased over the quarter leading to a decrease in earning. On a YOY comparison with Q3 of 2015 the underlying EBIT declined mainly due to lower realized alumina prices and negative currency effects of a stronger Brazilian Real. These factors offset the positive factors like reduction in raw material consumption and reduced costs for bauxite, energy and caustic soda. Brazilian Real continued to strengthen against the USD making other raw materials costly.

Production volume at Hydro Alunorte reached a record annual rate of 6.5 million tons in this quarter, exceeding the name-plate capacity of 6.3 million tons per year. The scheduled maintenance of the bauxite ball mill at Hydro Paragominas bauxite mine in June has caused a break in production flow and a drop in production in Q2. The drop has been compensated in Q3 after Hydro Paragominas increased the production.

Bauxite and Alumina remain on track with their improvement program "Better Bauxite & Alumina" targeting NOK 500 million in improvements for 2016.

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