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2003: A Very Good Year for Hydro
OSLO, Norway, Feb. 16 /PRNewswire-FirstCall/ -- Hydro's net income in 2003 was
NOK 10,968 million (NOK 42.60 per share) compared with NOK 8,765 million (NOK
34.00 per share) in 2002.
Consolidated Results (US GAAP)
(unaudited)
4th qtr 4th qtr 2003 2002
2003 2002
NOK NOK NOK NOK
Million,
except
per share data 44,533 44,007 171,782 167,040
Operating
revenues
Depreciation,
depletion
and amortization 4,014 3,706 15,093 13,912
Other
operating costs 33,382 34,305 132,431 133,297
Restructuring costs - - - (10)
Operating income 7,137 5,996 24,258 19,841
Equity in net
income of
non-consolidated
investees 379 484 1,229 33
Interest income
and other
financial income 349 334 1,467 1,418
Other income
(loss), net 490 - (1,212) 219
Earnings
before interest
expense and tax
(EBIT) 8,355 6,814 25,742 21,511
Interest expense
and foreign
exchange
gain/(loss) 22 223 (1,266) 517
Income before tax
and minority
interest 8,377 7,037 24,476 22,028
Income tax expense (4,636) (3,729) (13,937) (13,278)
Minority interest 24 (28) 148 15
Income before
cumulative effect
of change in
accounting
principle 3,765 3,280 10,687 8,765
Cumulative effect
of change in-
accounting
principle - - 281 -
Net income 3,765 3,280 10,968 8,765
Earnings per share
before change in
accounting
principle 14.70 12.70 41.50 34.00
Earnings per share 14.70 12.70 42.60 34.00
The result reflects overall improvements in Hydro's main business areas compared
to the prior year. The most substantial improvement related to a significant
increase in oil and gas production together with somewhat higher oil and gas
prices. The fertilizer business also improved its results due to higher product
prices and productivity gains. The improvement programs carried out by Aluminum
generated considerable savings for the year, although the weaker US dollar had a
negative influence on earnings for Aluminium and the other business areas.
In the fourth quarter Hydro's net income was NOK 3,765 million (NOK 14.70 per
share), compared with NOK 3,280 million (NOK 12.70 per share) for the
corresponding period in 2002. Operating income in the fourth quarter amounted to
NOK 7,137 million, compared with NOK 5,996 million in the same period last
year.
The Board proposes to the Annual General Assembly a dividend of NOK 11.00 per
share for 2003, compared withNOK 10.50 for 2002.
"2003 was an very good year for Hydro," says President and CEO Eivind Reiten.
"Our three business areas show solid improvement. Even though market conditions
have been good for many of our products, the improvements also reflect the
efficient implementation of improvement programs. We have also made important
strategic decisions, and the listing process for Agri is progressing according
to plan."
"Markets for semi-fabricated aluminium products have been weak, but we can see
small signs of improvement. The competitive position for our European aluminium
smelters is challenging, and we will continue our work to improve cost position
in these plants," says Reiten.
In the fourth quarter of 2003 Hydro's oil and gas production was 596,000 barrels
of oil equivalents (boe) per day. Production for the year averaged 530,000 boe
per day, an increase of about 10 percent from 2002. The growth in production was
evenly distributed between oil and gas. The strong production growth was above
original targets, and reflected high production regularity and high gas offtake
in the period. Average production for 2004 is estimated to be 560 000 boe per
day. Hydro's access to new oil and gas reserves comprises 215 percent of its
annual production. The increase in reserves is primarily attributable to the
Ormen Lange gas field, for which the development plan was submitted to the
authorities in the fourth quarter of 2003.
Aluminium operations posted a notably improved result in the final quarter, with
greater production volumes, a higher metal price and the business area's cost
improvement program all impacting positively, although a weaker dollar exchange
rate resulted in a negative effect. However, markets for semi-fabricated
products wereweak. The improvement program implemented following the
acquisition of VAW has now been completed, achieving an annual cost reduction
effect in line with the target of NOK 2.5 billion.
Hydro Agri has achieved very good results in both the fourth quarter and in 2003
as a whole. Higher fertilizer prices and sound operations at production plants
have contributed to the improved results, while higher energy costs have had a
negative influence.
Hydro's Extraordinary General Meeting resolved on 15 January 2004 to demerge
Hydro Agri. The new company will be named Yara International ASA, and be listed
on the Oslo Stock Exchange. The company will have approximately 7,600 employees
and be headquartered in Oslo where it will be among the larger public companies
in Norway. Yara has the right to use Hydro's former Viking ship logo, which is
an important fertilizer brand. Every Hydro shareholder, at the listing date,
will obtain one Yara share for each Hydro share held. In the demerger, 80
percent of the Yara shares will be distributed to Hydro's shareholders. Provided
that prevailing market conditions permit, Hydro intends to sell the remaining 20
percent of the Yara shares in an offering at the time of the consummation of the
demerger. The Yara shares tobe offered by Hydro have not been and will not be
registered under the U. S. Securities Act of 1933, and may not be offered or
sold in the United States absent registration or an applicable exemption from
the registration requirements of the U. S. Securities Act.
The provision for current and deferred taxes for 2003 amounted to NOK 13,937
million, approximately 57 percent of pre-tax income. The tax provision has been
strongly influenced by the effects of amendments to the Norwegian tax
regulations relating to the future costs of removing oil and gas installations
on the Norwegian continental shelf after production has ceased. In addition, the
tax provision for the third quarter included a one time positive effect of NOK
139 million relating to thefinal conclusion of an outstanding tax ruling in
Norway. Excluding these effects, tax expense amounted to 62 percent of pre- tax
income for 2003.
Investments in 2003 amounted to NOK 18.9 billion. The amount includes NOK 1.9
billion resulting from Hydro's adoption of Financial Accounting Standard No.
143, relating to asset retirement obligations. Excluding this effect,
investments were NOK 17 billion for 2003. Just over half of the investment
amount related to oil and gas operations. Investments are slightly lower than
planned, partly because of savings in development projects.
Cash flow from operations for 2003 was NOK 24.6 billion compared to NOK 21.8
billion for 2002. The increase compared to last year is mainly due to higher
earnings.
Following the acquisition of VAW in 2002 Hydro established a goal to dispose of
non-core business assets totaling NOK 10 billion. As of the end of 2003,
disposals have been completed or agreed for approximately NOK 9.8 billion.
Fourth quarter 2003
NOK million Operating income (loss)
Hydro Oil & Energy 5,994
Hydro Aluminium 709
Hydro Agri 907
Other Activities 10
Corporate and Eliminations (483)
Total 7,137
Year 2003
NOK million Operating income (loss)
Hydro Oil & Energy 21,143
Hydro Aluminium 2,456
Hydro Agri 2,800
Other Activities (414)
Corporate and Eliminations(1,727)
Total 24,258
Further information about Norsk Hydro ASA and the company's results are
available on the Internet: http://www.hydro.com/.
Certain statements in this press release are or may constitute "forward-
looking" statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Statements that are not in the nature of historical facts
may be deemed to be forward-looking statements and may contain identifying words
such as "believes", "anticipates", "plans", "expects" and similar expressions.
These forward looking statements are based on Hydro's current expectations,
assumptions, estimates and projections about the company and the industries in
which it engages in business. All forward-looking statements involve risks and
uncertainties. For a detailed description of factors that could cause Hydro's
actual results to differ materially from those expressed in or implied by such
statements, please refer to its annual report on Form 20-F for the year-ended
December 31, 2002 and subsequent filings on Form 6-K with the U.S. Securities
and Exchange Commission. With respect to each non- GAAP financial measure Hydro
uses in connection with its financial reporting and other public communications,
Hydro provides a presentation of what Hydro believes to be the most directly
comparable GAAP financial measure and a reconciliation between the non-GAAP and
GAAP measures. This information can be found inHydro's earnings press
releases, quarterly reports and other written communications, all of which have
been posted to Hydro's website (http://www.hydro.com/).
Contacts:
Peik Norenberg Tor Steinum
Telephone (+47) 22 53 34 40 (+47) 22 53 27 31
Cellular (+47) 91 76 15 56 (+47) 95 08 39 33
E-mail
http://hugin.info/106/R/934422/128851.pdf
DATASOURCE: Norsk Hydro
CONTACT: Peik Norenberg, +47-22-53-34-40, or cell: +47-91-76-15-56, or
, or Tor Steinum, +47-22-53-27-31, or cell:
+47-95-08-39-33, or , both of Norsk Hydro
Web Site: http://www.hydro.com/
http://hugin.info/106/R/934422/128851.pdf