SOURCE: Norsk Hydro

October 12, 2010 07:20 ET

Hydro updates expected earnings implications of Qatalum power outage

OSLO, NORWAY--(Marketwire - October 12, 2010) -

Norsk Hydro ASA's share of underlying earnings in Qatalum for the third quarter 2010 is expected to be a loss of about NOK 225 million including the effects of lost production and sales, but excluding write-offs of certain fixed assets of about NOK 115 million charged to the third quarter results.

For the fourth quarter 2010 Hydro's share of underlying earnings is expected to be a loss of about NOK 400 million. In total, the estimated underlying loss for the second half 2010 is about NOK 625 million compared to a loss of about NOK 285 million in the first half.

Following a shutdown due to an extended power outage on August 10, the Qatalum plant in Qatar restarted aluminium production on September 15. Qatalum is expected to reach full capacity by the end of the first quarter 2011.

Qatalum's insurance coverage related to the incident is considered robust. The insurance is expected to cover a majority of the loss related to fixed assets and business interruption, and Qatalum is in a constructive dialogue with its insurers to determine the exact coverage. Following the conclusion of these discussions the first payment on account from the insurers is expected to be requested during the fourth quarter 2010.

Qatalum is a 50-50 joint venture between Qatar Petroleum and Hydro. When complete, it will be one of the most modern, energy-efficient and environmentally high-performing aluminium plant in the world, with an annual production capacity of 585,000 tonnes of aluminium.

This information is subject of the disclosure requirements acc. to §5- 12 vphl (Norwegian Securities Trading Act)


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Source: Norsk Hydro via Thomson Reuters ONE

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