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2014-04-30

First quarter 2014: Higher sales volumes and power production lift results

Norsk Hydro ASA's underlying earnings before financial items and tax rose to
NOK 772 million in the first quarter 2014 from NOK 471 million in the fourth
quarter 2013. The result was lifted by seasonally higher sales volumes and
power production.

* Underlying EBIT NOK 772 million
* Seasonally higher sales volumes
* Increased power production
* Primary aluminium demand outside China continues to exceed production
* Investment in new automotive line and in new recycling capacity

"We see signs of improvement for the aluminium industry as aluminium demand
outside China continues to exceed production. Based on increasing use of
aluminium in cars and rising demand for recycled metal, we are making
investments in our rolled products business in Germany to expand automotive
and recycling capacity. At the same time, our ongoing operational improvement
efforts continue with unabated strength in all areas," says President and CEO
Svein Richard Brandtzæg.

Hydro will invest EUR 130 million in a new automotive production line at its
rolled products plant in Grevenbroich, Germany. The new line, expected to be
completed in second half 2016, will expand annual capacity for aluminium car
body sheets to 200,000 from 50,000 metric tons. Also in the first quarter,
Hydro decided to invest EUR 45 million in new recycling capacity in Germany,
in line with an ambition to double the company's total recycling capacity by
2020.

Underlying EBIT for the Bauxite and Alumina business area improved compared to
fourth quarter of 2013 which included the settlement of claims relating to
ICMS taxes. Alumina production for the Alunorte refinery was stable, however,
fuel costs increased mainly due to the introduction of ICMS taxation on fuel
oil from February 1.

"Alumina production has recovered and stabilized after the problems at the
Alunorte refinery last year. Many indicators are now pointing in the right
direction, both at Alunorte and at the Paragominas bauxite mine. We are
confident that the experience gained will make operations more robust," says
Brandtzæg.

Underlying EBIT for Primary Metal was down in the quarter, primarily due to
the insurance settlement received in the fourth quarter. Higher product
premiums and increased sales volumes were partly offset by higher costs for
alumina and power and lower realized LME prices.

Excluding negative currency and ingot inventory effects, underlying EBIT for
Metal Markets improved mainly due to higher results from sourcing and trading
activities.

Rolled Products underlying EBIT increased in the first quarter due to
seasonally higher sales volumes and lower maintenance costs partly offset by
lower margins.

Underlying EBIT for Energy increased mainly due to higher power production.

Underlying EBIT for Sapa improved compared to the fourth quarter, influenced
by seasonally stronger sales volumes.

Operating cash flow was negative NOK 0.7 billion for the first quarter
impacted by a seasonal increase in working capital and a tax payment related
to a disputed tax claim in Norway. Net cash used for investment activities
amounted to NOK 0.6 billion. Hydro's net debt position amounted to around NOK
0.6 billion at the end of the first quarter.

Reported earnings before financial items and tax amounted to NOK 822 million
in the first quarter. Reported EBIT included net unrealized derivative gains
amounting to NOK 170 million in total. Reported earnings also included
impairment charges of NOK 33 million related to the agreed divestment of
Hydro's casthouse in Hannover and charges of NOK 86 million (Hydro's share)
in Sapa primarily related to rationalization activities.

Income from continuing operations amounted to NOK 462 million in the first
quarter including a net foreign exchange gain of NOK 193 million. In the
previous quarter, loss from continuing operations amounted to NOK 758 million
including a net foreign exchange loss of NOK 688 million.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Key financial information First quarter 2014 Fourth quarter 2013 %change prior quarter First quarter 2013 %change prior year quarter Year 2013 |
| |
|NOK million, except per share data |
| |
|Revenue 18 282 16 570 10 % 16 109 13 % 64 877 |
| |
|Earnings before financial items and tax (EBIT) 822 (14) >100 % 704 17 % 1 663 |
|Items excluded from underlying EBIT (50) 485 >(100) % 372 >(100) % 1 063 |
|Underlying EBIT 772 471 64 % 1 076 (28) % 2 725 |
| |
|Underlying EBIT : |
|Bauxite&Alumina (288) (379) 24 % (63) >(100) % (1 057) |
|Primary Metal 312 484 (36) % 364 (14) % 1 422 |
|Metal Markets 141 190 (26) % 146 (3) % 594 |
|Rolled Products 181 100 81 % 152 19 % 615 |
|Energy 435 383 14 % 517 (16) % 1 653 |
|Other and eliminations (8) (306) 97 % (38) 78 % (502) |
|Underlying EBIT 772 471 64 % 1 076 (28) % 2 725 |
| |
|Underlying EBITDA 1 861 1 619 15 % 2 212 (16) % 7 306 |
| |
|Underlying income (loss) from discontinued operations - - - 49 (100) % 220 |
| |
|Net income (loss) 462 (758) >100 % 263 76 % (839) |
|Underlying net income (loss) 388 140 >100 % 649 (40) % 1 610 |
| |
|Earnings per share 0.19 (0.39) >100 % 0.14 37 % (0.45) |
|Underlying earnings per share 0.16 0.02 >100 % 0.30 (46) % 0.65 |
| |
|Financial data: |
|Investments 546 1 057 (48) % 1 077 (49) % 3 761 |
|Adjusted net interest-bearing debt (11 230) (10 128) (11) % (9 858) (14) % (10 128) |
| |
| |
|Key Operational information |
| |
|Alumina production (kmt) 1 428 1 452 (2) % 1 361 5 % 5 377 |
|Primary aluminium production (kmt) 484 492 (2) % 478 1 % 1 944 |
|Realized aluminium price LME (USD/mt) 1 749 1 802 (3) % 2 043 (14) % 1 902 |
|Realized aluminium price LME (NOK/mt) 10 702 10 916 (2) % 11 533 (7) % 11 160 |
|Realized NOK/USD exchange rate 6.12 6.06 1 % 5.64 8 % 5.87 |
|Metal p...

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