Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Q4 2002 Earnings Presentation
23 slides from Norsk Hydro Asa's earnings presentation, Feb 10, 2003
Slide 1: Preliminary results 2002
Preliminary results 2002 Norsk Hydro ASA 10 February, 2003
Slide 2: Norsk Hydro – highlights
2 Norsk Hydro – highlights High oil and gas prices, weak aluminium and fertilizer markets Weaker USD and strong NOK hit all business areas Currency gains on debt Record high oil and gas production Aluminium improvement program on track Unrealized gains on power contracts in Q4, NOK 900 million Expec
Slide 3: Net income
3 Net income Per quarter NOK million 6 000 Gains from divestments 5 000 4 859 4 000 3 896 3 383 3 235 3 000 2 775 2 840 2 451 2 180 2 132 2 000 1 260 1 333 1 144 1 000 709 813 634 513 0 1999 2000 2001 2002 Accumulated 3 416 13 981 7 892 8 868 41467E - 02.2003 - *3 - Hydro Media
Slide 4: Earnings per share
4 Earnings per share NOK Gains from divestments 20 18.6 18 16 14.9 14 13.1 12.4 12 10.6 11.0 10 9.4 8.4 8.3 8 5.5 5.2 6 4.4 4 3.1 3.1 2.4 2.0 2 0 1999 2000 2001 2002 13.8 53.4 30.5 34.40 41467E - 02.2003 - *4 - Hydro Media
Slide 5: Dividend
5 Dividend NOK/share 12 10.5 10 10 9.5 8 8 7.5 7.5 7 6 4 2 0 1996 1997 1998 1999 2000 2001 2002 proposal 41467E - 02.2003 - *5 - Hydro Media
Slide 6: Consolidated income statements
6 Consolidated income statements 4th quarter 4th quarter NOK million 2002 2001 Operating revenues 39 635 34 670 Operating income 6 139 2 832 Equity in net income of non-consolidated investees 484 265 Interest income and other financial income 334 788 Other income - (19) Earnings before interest expe
Slide 7: EBITDA
7 EBITDA Individual operating segment 4th quarter 4th quarter NOK million 2002 2001 Exploration and Production 7 312 5 271 Energy and Oil Marketing 692 257 Eliminations 26 - Hydro Oil and Energy 8 030 5 528 Metals 964 (349) Rolled Products 47 25 Extrusion and Automotive 285 (91) Other and Eliminatio
Slide 8: Net interest-bearing debt/shareholders' equity
8 Net interest-bearing debt/ shareholders’ equity* Ratio 0.71 0.7 0.6 0.5 0.44 0.41 0.4 0.28 0.3 0.2 0.1 0 1999 2000 2001 2002 * Net interest-bearing debt divided by shareholders' equity plus minority interest 41467E - 02.2003 - *8 - Hydro Media
Slide 9: CROGI – development
9 CROGI – development Actual and normalized prices % Normalized assumptions: 14 NOK/USD 8.00 12 NOK/EUR 7.60 Brent bbl $18 10 9 9 CAN27 tonne $113 8 8 LME 3M tonne $1 500 6 Restructuring charges and gain/loss on divestments 4 excluded in normalized CROGI 2 8.5 12.5 9.4 8.6 0 Volumes and margins are
Slide 10: CROGI per business area
10 CROGI per business area Actual prices 16% Oil & Energy Aluminium Agri 14% 12% 10% 8% 6% 4% 2% 0% 1999 2000 2001 2002 1999 2000 2001 2002 1999 2000 2001 2002 41467E - 02.2003 - *10 - Hydro Media
Slide 11: Pensions
11 Pensions NOK million 2002 2001 2002 development Total pension obligations (23 714) (17 620) Increased obligations Pension Plan Assets – funded plans 15 122 16 876 Compensation increase Funded status of the plan (8 591) (744) higher than assumed Net amount recognized on balance sheet (346) 2 803 R
Slide 12: Oil and Energy – highlights fourth quarter
12 Oil and Energy – highlights fourth quarter Excellent production performance, high gas offtake Q4 production 540 000 boe/d 3 discoveries – Tyrihans, Aurora, Zinia Solsikke dry High earnings from Energy NOK 300 million unrealized gain in power contracts Project execution Major Hydro operated projec
Slide 13: Reserve replacement
13 Reserve replacement Proven reserves, million boe Reserves 2002 2 073 Reserve upgrades 46 New reserves 117 Sales, purchase and swaps 186 Production (175) PSA effect (22) Reserves 31.12.2002 2 225 Reserve replacement 1) 98% Reserve replacement 2) 187% Reserve life oil 9 years Reserve life gas 26 ye
Slide 14: Exploration
14 Exploration Expensed, Activity Capitalized NOK million capitalized Expensed current period current period previous years Q1 Misc. Norway Gulf Of Mexico (Kate) 623 316 406 714 Hebron Q2 Angola (Block 34 and Block25) 634 86 387 936 Trinidad and Tobago Q3 Angola (Block 34) Gulf Of Mexico (Spa) 605 -
Slide 15: Oil and Energy – prospects
15 Oil and Energy – prospects 2003 production target 510 000 boe/day Ormen Lange development plan (PDO) in 2003 Ormen Lange reserves main contributor towards achieving F&D costs of USD 5/boe Reorganization and manning reductions to improve performance 41467E - 02.2003 - *15 - Hydro Media
Slide 16: Aluminium – highlights fourth quarter
16 Aluminium – highlights fourth quarter Integration and improvement programs on track Ambitions raised in Q4 Ahead of schedule First phase of Sunndal expansion completed Business environment weak Realized price USD 1 313 per tonne, NOK prices down 20% vs Q4 2001 Downstream demand and margins remain
Slide 17: Aluminium – business comments
17 Aluminium – business comments Satisfactory Metals result Margins in Norwegian smelters under pressure Weak Rolled Products result Lower volumes Inventory loss due to falling metal prices Good performance in European extrusion system Technal integration ahead of plan US extrusion markets still wea
Slide 18: Aluminium – improvement program on track
18 Aluminium – improvement program on track Workforce reduction Cost reductions 2000 3000 Magnesium Aluminium Magnesium Aluminium 2500 1500 2000 1000 1500 1000 500 500 0 0 YTD Q2 YTD Q3 YTD Q4 Target Target YTD Q2 YTD Q3 YTD Q4 Target Target Target 2002 2003 2002 2003 2004 Restructuring and rational
Slide 19: Aluminium – prospects
19 Aluminium – prospects Market outlook Uncertainty regarding US and German economies Flat volume development expected, continued pressure on margins Focus on self-help measures Improvement programs Turnaround of under-performing units 41467E - 02.2003 - *19 - Hydro Media
Slide 20: Agri – highlights fourth quarter
20 Agri – highlights fourth quarter Satisfactory results, but negative impact from Currency development High gas costs Low urea prices Operating capital reduced Favourable competitive position 41467E - 02.2003 - *20 - Hydro Media
Slide 21: Agri – prospects
21 Agri – prospects Tighter supply/demand balance, increasing fertilizer prices Margins under pressure due to currency effects and high gas costs Stable fertilizer sales volumes Continued productivity improvements 41467E - 02.2003 - *21 - Hydro Media
Slide 22: Norsk Hydro – priorities ahead
22 Norsk Hydro – priorities ahead Meet 2003 CROGI target 8.5% - 9.5% (normalized) Deliver on Aluminium improvement program Deliver on petroleum production target Strengthen Agri’s global leading position Complete NOK 10 billion divestment program Maintain financial strength 41467E - 02.2003 - *22 -
Slide 23: Safe harbour statement
23 Safe harbour statement In order to utilize the "Safe Harbour" provisions of the United States Private Securities Litigation Reform Act of 1995, Hydro is providing the following cautionary statement: This presentation contains certain forward-looking statements with respect to the financial condit