Norsk Hydro ASA (NHYDY.PK) reported Tuesday that second-quarter underlying income from continuing operations dropped 38% to NOK 1.34 billion from NOK 2.15 billion in the second quarter of 2007, mainly due to the weakening US dollar and an industry-wide rise in upstream input costs that more than offset the positive effect of higher aluminum prices. Underlying earnings per share from continuing operations fell 41% to NOK 1.00 from NOK 1.70 in the prior-year quarter.
Second-quarter income from continuing operations was NOK 902 million or NOK 0.70 per share, down 65% from NOK 2.58 billion or NOK 2.00 per share in 2007. Quarterly revenue declined by 4% to NOK 23.98 billion from NOK 25.04 billion last year.
The company noted that second-quarter underlying results for Aluminum Products increased substantially from the first quarter of 2008, driven by a significant improvement in the company's Rolled Products business. Lower spot prices for electricity in Norway negatively affected Hydro's Energy business during the quarter.
Looking ahead, Hydro expects a moderate market slowdown for semi-fabricated products in Europe on top of seasonally lower demand, impacting business in the second half of the year. In the US, the company expects the market for semi-fabricated products to remain at the current depressed levels.
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