Norsk Hydro aluminum group; profits plunge 87 percent
Aluminum and energy group Norsk Hydro ASA told the press that its profit dropped 87 percent in the second quarter on falling sales and higher costs.Net profit was 786 million kroner ($155 million), down from 5.95 billion kroner in the same quarter last year.
Sales dropped 4 percent to 23.98 billion kroner ($4.72 billion) from 25.04 billion kroner in the second quarter of 2007. The year-ago figure excludes profit from its oil unit, which was taken over by Norway’s government-controlled Statoil ASA in October to form StatoilHydro ASA.
Hydro shares, which had dropped about 25 percent in the past month, fell slightly to 62.60 kroner ($12.33) in Oslo after the report. Hydro, which had issued a profit warning earlier this month, citing cost increases, blamed the drop on the weakening U.S. dollar and higher input costs in the aluminum industry. It said the higher costs more than offset the positive effect of higher aluminum prices.
Eivind Reiten, Chief Executive, said that “Hydro experienced a drop in its second-quarter results due to the rising input costs affecting the entire industry, While these pressures will likely remain for some time we continue to show strong operational performance”