Hydro Annual Report 2011b

88
FINANCIAL AND OPERATING PERFORMANCE
Primary Metal
Primary Metal
Operational and financial information 1)
Year
2011
Year
2010
% change
prior year
Underlying EBIT (NOK million) 2 486 617 >100 %
Underlying EBITDA (NOK million) 4 671 2 374 97 %
Realized aluminium price LME (USD/mt) 2)
2 480 2 113 17 %
Realized aluminium price LME (NOK/mt) 2)
13 884 12 674 10 %
Realized premium above LME (USD/mt) 3)
333 317 5 %
Realized premium above LME (NOK/mt) 3)
1 866 1 906 (2) %
Realized NOK/USD exchange rate 5.60 6.00 (7) %
Primary aluminium production (kmt) 1 982 1 415 40 %
Casthouse production (kmt) 2 463 2 022 22 %
Casthouse sales (kmt) 2 451 2 008 22 %
1) Operating and financial information includes Hydro's proportionate share of underlying profit (loss), production, prices, premiums and exchange rates in
equity accounted investments.
2) Including effect of strategic LME hedges (hedge accounting applied).
3) Average realized premium above LME for total metal products sold from Primary Metal.
Underlying results in equity accounted investments 4)
NOK million
Year
2011
Year
2010
% change
prior year
Søral (49.90%) 23 7 >100 %
Qatalum (50.00%) 18 (648) >100 %
4) Underlying results are defined as share of net income adjusted for items excluded.
Primary aluminium and casthouse production (kmt) 5)
Primary aluminium Casthouse production
Location 2011 2010 2011 2010
Albras Brazil 381 ­ 379 ­
Karmøy Norway 184 182 218 239
Årdal Norway 205 201 309 309
Sunndal Norway 300 291 420 441
Høyanger Norway 62 61 117 115
Søral (Hydro's 49.9% share) Norway 45 44 59 65
Slovalco Slovakia 163 163 184 188
Neuss Germany 53 52 174 217
Kurri Kurri Australia 180 179 184 182
Tomago (12.4% share) Australia 67 65 66 65
Qatalum (50% share) Qatar 225 63 234 86
Alouette (20% share) Canada 116 114 116 114
Total production Primary Aluminium 1 982 1 415 2 463 2 022
5) Production volumes for part owned companies represent our proportion of total production. For financial reporting purposes, Søral and Qatalum are
accounted for as equity accounted investments, while Tomago and Alouette are consolidated on a proportional basis. Slovalco and Albras are fully
consolidated in terms of financial results and volumes.
Underlying EBIT for Primary Metal improved significantly in 2011, driven by higher realized aluminium prices, higher
volumes and improved earnings for Qatalum following the completion of ramp-up of the plant. Positive developments were
partly offset by substantially higher raw material costs. Inclusion of the Albras smelter from March 1, 2011 also had a positive
effect on underlying EBIT. See section on Pro forma information - Primary Metal later in this report.
Excluding Albras, higher realized aluminium prices 6) together with higher premiums, contributed about NOK 2.5 billion to
underlying EBIT compared with 2010. LME linked alumina costs increased, together with higher costs for carbon and power.
Fixed costs for our smelter portfolio, excluding Albras, declined somewhat. Our USD 300 per mt cost improvement program
was on track, delivering cumulative savings of USD 200 per mt by the end of 2011 compared to 2009.