Norsk Hydro ASA

Stefan Solberg – Head, IR Svein Richard Brandtzaeg – President and CEO Joergen Arentz Rostrup – EVP and CFO

Rob Clifford – Deutsche Bank (Call Starts Abruptly)

opportunity to ask questions after the presentation also via the web. Before we start, I would like to remind all the cautionary notes in relation to certain forward-looking statements that we have provided in the presentation material.

And with this short introduction, I’m pleased to hand over to Svein Brandtzaeg.

Thank you, Stefan. Hydro delivered improved quarterly results with higher volumes, better margins and higher aluminum prices in the quarter.

All in all we sold more aluminum to better prices. If you take a look at the highlights first of all we are happy to confirm that integration of the Vale assets and our new employees in Brazil are on track.

We are also happy to confirm that we are according to plan with $300 program and also all the ramp up of Qatalum is continuing. And second quarter market situation was poor market which means that we also are including the 7% growth for 2011, however with higher degree of uncertainty going forward due to the macroeconomic situation.

Underlying results, its NOK 450 million better than the previous quarter, 1.3 billion better than the fourth quarter of last year. This is very much due to several factors, but they include volumes in Paragominas and Alunorte very important contribution.

Better prices for alumina and aluminum somewhat offset by higher interest prices. We had strong contribution from energy, seasonally lower volumes and lower prices, but still good contribution.

Metal markets, higher volumes, better margins and fairly stable results in downstream. If you take a closer look into the Metal Products excluding sales we had 5% improvement in volumes and excluded ingots due to higher demand in extrusion, hitting all 4% improvement since the previous quarter, fairly stable in foundry alloys up to 19% improvement in the first quarter.

And we’ve now included Albras volumes and 122 kilograms Albras volumes in the second quarter, in the first quarter we included only 43 kilograms Albras volumes. Now, if you away Albras volumes and compare first half year 2011 with first half year 2010 we have imported 6% higher Metal Products.

The picture is more mixed when we take a look at the downstream situation, where we have had fairly stable total volume in Metal Products with seasonal upswing higher volume in Extruded Products. In Rolled Products, we had lower volumes throughout the markets.

We experienced destocking in lithu and foil and we had better sales in can and general engineering. In Extruded Products, you will see a seasonal 4% higher than previous quarter, 7% higher in building system.

There we have a very weak market situation in building and construction in Southern Europe and specially Iberia. We have a fairly stable situation in France and improvement in building system in Germany.

In North America, 9% higher than previous quarter driven by increased sales to transportation and we have a healthy situation in South America following seasonal lower demand for extrusion in Brazil in the first quarter. Precision Tubing lower especially this is especially related to our sales to Japanese OEMs in North America.

All in all, fairly stable quarter-by-quarter, but 3% higher first half year 2011 compared to first half in 2010. LME supplement prices varied between NOK 2500 to NOK 2600 dollars per ton due to forward pricing.

Prices for the second quarter will be reflected in the third quarter results. The realized LME for the second quarter was $2509 per ton.

If you take a look at the inventories, we’re in a similar situation today as we were in the first quarter due to higher demand inventory days are trending down, but it’s small at least from the aluminum metals from 4.6 million to 4.5 million tons all in all a fairly stable, if we include all inventories globally we estimate about 11 million tons in total, which corresponds to about three months of production and these inventories are looked into financially. These are the inventories well known in the market and are of course limiting excess into the physical market of some ingot and this is also factored into development of ingot premiums, which will now remain on high level in Europe, stable in Japan and we saw a significant increase in either premiums in the Midwest and U.S.

premiums, well and that’s related to three factors, one is warehousing deal, second one is increased demand in the U.S. market and third one is let’s import from South America through the North American market.

We follow China carefully. We view China as a balanced aluminum market.

The increase in production in China was 12% in the first quarter, which is again to support the domestic demand, which increased to 20% in quarter and China is now consuming about 20 million tons. Significant volumes, we also follow across the balance on import and export.

China continue to import very similar amount of scrap as before that we saw a significant decrease in export of semis from China into global. This we have to follow carefully.

We don’t see that this is impacting our main markets in downstream in Europe or U.S. but it is impacting the local Asian market.

New capacity on our new and high cost areas of China, Southeast over to Northwest and then replacing our high-cost capacities with lower cost capacity in China. As up to-date we see the market outside China in balance.

As I mentioned we maintained 75% growth estimate for 2011 with the uncertainty that we have there due to the more volatile market environment and global macro-economic situation. The capacity now is – also now the capacity is still kept outside the production, 1.2 million tons is restarted of the curtailed capacity and it is 1.3 million tons that can be restarted.

The aluminum market, we view in the balance, the graph on the left side shows that volatile aluminum price over the last year and the right one is the flex index introduced in August last year, which gives interesting information about the development, alumina price that’s about $400 a ton recently which corresponds to 15% to 15.5% of LME. This is a very positive signal that we have to keep in mind that limited volumes and also limited history in the flex index – flex alumina index.

Energy delivered good results due to good operation and good commercial performance in the quarter. If you take a look at the price development in Nordic markets we have the reduction in prices in the beginning of the quarter due to the early snow melting, due to warmer weather and last also the quarter we had additional reduction in prices due to heavy precipitation, which resulted in improved hydrological situation in Norway, after a (inaudible) winter we have now more or less come back to normal with regard to hydrological situation.

Bauxite & Alumina production in Brazil, which is then Paragominas, one of the biggest bauxite mines in the world which is a part of the deal we made and closed and also then Alunorte, which is the biggest alumina refinery in the world. We see potentials to continue the increase in volumes in Brazil and we are now combining our capabilities and process indices together with the high capabilities of our employees coming from Vale, the second biggest mining company in the world with high skills and good capabilities in mining and we are now able to lift up volumes in alumina to 12% in the quarter of course also done affecting the cost possibly and going down and then also improved the volumes from Alunorte 8% in the quarter, which is also then affecting the cost of alumina.

We are of course attacking several areas. We are focusing very much on operational performance, very much maintenance that was a change from active maintenance to preventive maintenance towards productive maintenance.

We are targeting most of this production on the higher level than what we have today, but this is slightly speeding up anchorship and takes some time. This is not the quick fix, but we are on the right track.

The $300 program that we have introduced in our fully owned smelters is completing according to plan. We delivered $50 per ton improvement last year.

This year we are going to deliver another $125 per ton in improvement. This is in total then $175 per ton in the end of the year compared to 2009 and this is now impacting the results positively.

If you take a look at the corporate portfolio the cash cost went up $200 from 2010 due to higher input cost, 125 of the $200 can be ascribed to higher alumina prices; the rest is due to higher energy prices, higher cost of pet coke and weakening dollar. And we have now also included Albras from 1st of March.

What is interesting here is to see the EBITDA margin that has been developed positively over the last period, $500 per ton in the EBITDA margin in the first half of this year significantly improved since 2010, and we all have to go back to 2008 to find similar figures, $475 per ton EBITDA margin in 2008. At that time the price alumina was NOK1000 higher than the price we have today.

So this is important result out of improvements and what I can say here is that we’re targeting further improvement of course including through the $300 program, which is then affecting the (inaudible) factors. Qatalum is ramping up.

We had 71% of ourselves in full production at the end of the quarter. We have communicated previously that further ramp-up depends very much on commissioning of the steam turbines and I am happy to confirm that we took over the first steam turbine in the beginning of July, meaning that it ramped up noise moving according to what we have said previously that the plant will be in full operation in the end of the third quarter.

If you take a look at the cash cost we estimate went in full production, if you take 2010 market conditions because cost of the Qatalum smelter was estimated to be $1400 if the LME is $2000 per ton and $1500 per ton if LME is $2500 per ton. So, this is again similar currencies to how we estimate the cash flows to be.

We have decided to invest in new extrusion capacity in Brazil to target the automotive, transport business that we call it survival and long haul profiles, which needed a new capacity and we are now increasing gradually our market share in Brazil and a very interesting growing – fast growing market with good margins. So, that is addition to our strategy to grow in the emerging market.

We have previously promulgated that we are investing in two new process in China targeting the heat ventilation, air conditioning markets, which was previously colorful by couple and also the technically advanced extrusion market. So, I’m not going to compete in China in the low margin commodity segment that we are not talking about technology to advance extrusions.

We decided yesterday and agreed yesterday to divest our shares in power production company in Nordland in north part of Norway. This is a part of SKS Produksjon, which produce 1.8 terawatt hour higher, 20.86%.

We have the dividends from the Produksjon Company, which correspond to about NOK $30 million each year during the last couple of years. It is far away from our aluminum smelters with customer (ph) synergies at our 9.4 terawatt hour fully owned hydro power assets that are linked to the production of aluminum.

But it’s – I’m happy to confirm that we are satisfied with the cash consideration of NOK 1 billion, when we come up with these assets for this year, which will give us tax-free contribution to the third quarter results of NOK 650 million. Before closing it’s in fact today.

So with that I hand over to our CFO, Joergen Rostrup, please.

Thank you, Svein. Let me then take you through briefly some financial numbers and start with underlying EBIT.

As you can see NOK 1.906 million in the quarter up 31%, NOK 458 million versus first quarter I will get back to the business areas to just draw your attention to Other and Eliminations, which I’ll not go through later. It’s a significant change in the numbers.

It’s a charge of NOK 65 million versus a significantly higher charge in first quarter. And this is due to two factors.

It is more or less neutral effects on the elimination of those internal inventory gains and losses and versus large share charge of NOK 160 million last quarter. So that is 160 to 180 in change and then goes to 100 million lower cost charge this quarter several minor projects, several common function and step functions with a lower charge and also good earnings from the capital insurance company.

It’s more along off than anything else we are gradually taking down the cost, but we will still guide on NOK 150 million in charge a quarter taking not into consideration the inventory effects. So then if you look at the main estimation of that NOK 0.5 billion improvement quarter-on-quarter there again as you see several smaller element on the price and margin side today from the LME type currency NOK 0.1 billion in positive effect and margins up and downstream, but primarily upstream it’s improving by a NOK 0.1 billion.

But for the alumina three months as opposed to one month is a little bit more than NOK 1 billion. And then the volume elements on one side aluminum being positive by NOK 0.3 billion, but then as Svein said the Energy volumes are down for seasonality reasons by the same amount NOK 0.2 billion and then there are some other effects.

Key financials revenue is up 17% or NOK 3.6 billion in the quarter, a little bit more than half of that is related to then the Vale assets being included in a longer period and the remaining is volume and price effects on our continuing business. The same numbers for the year – half year compared to last year’s half year is 21%.

And then we have a positive charge item excluded, so there is a gain on item excluded, which means that we are actually having a report EBIT higher than down the line that we are more viewing as a performance EBIT. Financial income is a positive number this quarter.

Obviously we have lower financial interest than previous quarters due to lower cash balance. We have some more financial costs because of the debt that we took over from the Vale assets, but there are currency effects due to the weaker dollar we have the debt that we have in dollar and the weakening of the dollar towards euro, Norwegian Kroner and Brazilian Reais have led to our currency gain unrealized on those debt elements.

Tax expenses 790 million for the quarter and there is a table for you detailing out this. We’ve an adjusted tax basis at 33% tax, which is lower than previous quarter, simply due to the fact that energy high tax earnings are lower part of the total earnings this quarter.

Briefly the item excluded, the three first elements being a gain in total of approximately 300 million are all due to the development of commodity prices in the period. There has been a lot of leads to decreasing LME during the quarter and hence we had unrealized gains not that leads to due to the operational hedging as we’ve discussed previously.

Then our rationalization charges up 75 million. That is divided on several smaller assets in Norway and also abroad.

So there are three, four elements there adjusting capacities and closing or turning down an old factory building. Impairment charges with solar company, it’s an investment ground, we’ve discussed previously in our strength in the U.S.

and due to the development of share price in that company we have taken down the book value of it. We haven’t invested in this company for some time and we will not invest, we assume further in the solar business.

And then there are some gains on some smaller divestments outside our core business also so all in all 206 million in positive effect. So let me address that this is – and if you remember last quarter we are doing Bauxite & Alumina as well as Primary Metal on that pro forma basis, which basically means that we have adjusted our consolidated numbers and assumed the consolidation took place much earlier, so that we have full quarters for the comparison – for the sake of comparison.

So Bauxite & Alumina is pro forma basis and also later Primary Metals. And in this picture as Svein said alumina production is up 8% and bauxite production is up 12% and sales are up even more around 18%.

So we see improved production performance and in both core assets in the quarter. We are also seeing higher alumina prices due to the fact that it follows in the contract portfolio of the aluminum prices and the aluminum had an upper trend towards the quarter’s assessment list.

But as you remember as when we did the acquisition, we hedged for 2010 and 2011 as part of the transaction we hedged I think with in the part of the additional LME exposure that we took on board at that time. This was last spoiling and we saw a very volatile market and we saw fairly robust pricing in the spring and we hedged around 2400 unchanged for 2010 and 2011, the majority of the new exposure.

So there is relief on the pricing and the effect of the hedge for this quarter is negative 60 million. There are also some increased variable cost there.

Goal number one is to improve continued production going forward and that is the aim for third quarter and also to work on seeing that we can stabilize production at a higher level. There are hedging elements down for the remaining years – for the remaining of the year in total similar to 180 kilotons of aluminum equivalents, which is covering the majority of production in Bauxite & Alumina for the remaining of the year.

If we now look at Primary Metal also pro forma numbers, we have an improvement of 30% on the energy result. And looking at these improvement of $173 million quarter-on-quarter, three quarter of that’s close to $130 million is due to higher prices and premiums in the quarter.

We also had higher volume implying an additional effect of $70 in the quarter, but that has been counteracted by a negative raw material cost of our plan say 93 within the quarter. And then Qatalum had negative result, our share 50% of $60 million, which is a little bit down from last quarter, but then remember we had $145 million in insurance proceeds last quarter.

There is zero insurance proceeds in the Qatalum numbers this quarter. So now we are on a quarterly basis in a zero EBIT level and that should improve and become positive numbers eventually when we are heading towards that full production of Sunndal.

Going into next quarter 85% of our production excluding Qatalum has been sold at 2575, so marginally up from today’s level and the earnings in a way internally – obviously they’re also influenced by the dollar development going forward. We still expect some raw material cost pressure and then as Svein said Qatalum on full production is expected by the end of this quarter.

So we are not on a pro forma basis for net markets, you see a substantial increase in sales, it’s a 14% increase in sales and this is then primarily due to the Albras volumes and also increased volumes out of Qatar being marketed through this commercial division. Production on the agreement are fairly stable, they will improve and the numbers in the south of 100 million up to 244 million in the quarter.

Half of that approximately 50 million is due to gains on inventories that we have brought at the lower price level than what we have sold in the quarter. We have previously taken the hedge effect of that, but we are not able to accounting wise to write-off the inventory values, so only when we realize these inventories, which we have done in this quarter we will see the effect.

So that is half of the effect. The other half is more a performance related effect.

It is better prices and volumes, but it has also increased sales volumes and the good trading business in the quarter. So when you pull that we expect some lower agreement production due to seasonality in the third quarter not significant, but somewhat.

We also expect some higher sales volumes that only to limited to the degree influencing the financial numbers and still – and volatility in the numbers, which comes due to the trading and currency implications. On the Rolling side I think it’s fair to say that we have stable deliveries in the quarter at fairly good levels, definitely at least in the historic perspective, volumes are more or less neutral.

It’s 1% down and EBIT number is exactly the same as last quarter 232 million. There has been lower cost in the period, so that has balanced out the lower volumes.

We see some market segments improving and we are also seeing in some markets dynamics some de-factoring effects with our customers. Then it is also important to put a note on you’re comparing second quarter this year to second quarter last year, which was at a significantly higher earning level 309 million.

So there is a 25% lower result for this quarter. That is related to the 15% volumes that we are exporting out of Europe and in to primarily the U.S.

and it’s so much more favorable margin picture last quarter also due to the higher dollar value versus euro last year. So if you correct for that dollar effect volumes and margins are very, very similar for the quarter also compared to last year’s second quarter.

I think the most important outlook side is to mention that although we will have seasonality also here, we feel we had a very solid order book for the entire year. So basically we will run our factories at very high production levels.

The picture is so much different in the other downstream segments that we have, I forgot to say there is a lot of weak result in Extruded although somewhat mixed picture, but overall although we had a 5% increase in volumes due to normal seasonality development we had lower earnings and weak results. And this is primarily due to the European construction market, building and construction markets, which affects us in two ways; the direct effect is obviously that we sell less to the European construction and building market in particular in Spain, Portugal and Italy.

So that is the direct effect and the other effect is that anybody is then working harder on those other segments. So you will get a general margin pressure in the industry in Europe as the secondary effect of it.

When we look at markets outside the Europe, we have very positive development in South America. We also have positive development in the precision tubing business which is a global business and they see good markets both in Europe, in the U.S.

and in Asia, China, this is both for heat management and cars, but also for stationeries and we see good solid markets. But it’s not enough to contract completely the negative development in the core extrusion area.

Going forward there are some clear effect that we expect a difficult construction market in Europe to continue and we are taking swift measures in our building system business to counteractive. So earning wise we should definitely seeing some improvement, but third quarter could also be somewhat challenged.

Energy had lower sales of some 200 million – 210 million in the quarter, but we’re still very happy to see the performance and earnings and also the production level. It’s a 20% lower production, but it was more than what we anticipated when we gave you the guidance in first quarter, it has been a very much more healthy development (inaudible) what lies in second quarter and in particular in the latter second half of second quarter than what we anticipated.

So the production is higher in the quarter than anticipated. And going forward, we expect that better balance to continue and therefore could see a much higher production in the next two quarters and our best driving is now that we’re moving towards a normal production for the year, which means moving maybe above (inaudible) to roll that 9.40 that we are saying it’s our normal condition.

Cash development in the quarter we have added 0.9 billion in debt in the quarter in net debt. We have generated from our business 1.4 and then we have invested little bit more than a 1 billion in the quarter, half of this is related to the Bauxite & Alumina area and then we have paid dividend to our shareholders in the quarter.

So we have had a small increase in debt in the quarter still at very robust levels we believe. And that is also then reflected in the adjusted net debt had only change on top of what I said now is that simply for inflation of our lower dollar, interest our share of back to not consolidated companies has decreased.

So the adjusted debt level is no less than the same level approximately at NOK 20 billion to NOK 21 billion. Now at least for the rest of these shares remains the same to continue the improved performance and books of alumina industrial and to continue after the repositioning of our fully owned smelters and included they continued to deliver on the $300 per one, which is contract.

And ramped up the coupling across important part of the primary business and finally continue our strong focus on the operational performance, our margin management and are pleased to take good care of our customers.

Thank you.

Normally I will look for questions for – if they are removed hopefully on the sort of different question fast and talking our questions (inaudible).

(Inaudible) from Bank of America Merrill Lynch.

Thanks guys. Three important otherwise just a couple of questions I guess perhaps one for Joergen on the non-recurring items and then one on smelter spend like just on the aluminum market.

On the non-recurring items I am surprised to see that the metal inventory gains and losses and then the currency translation gains and losses flowing through the underlying EBITs or did I misunderstood that or is that what are coming through?

Well, I need to have your question repeated.

Okay, I’m sorry and so is it correct to say that in the underlying EBIT of the Metal marketing business you’ve included a gain on the metal inventory.

Yes.

And you think that’s appropriate in terms of ongoing indication of the business?

Yes, I believe it is. Let’s see if we can work it out.

I guess, you are pointed to what you think is a different treatment of this.

I guess, what I’m trying to do here is, I’m trying to get through sort of the predictability of your earnings. My understanding was that underlying EBIT was made to strip out these gains and losses which is going to directly relate to that.

Yes, I guess, your basic understanding is, it’s correct with the exception in metal markets to the fact that the nature of the business in metal market is trailing and the commercial activity. And when you’re buying – buy stock, we buy physical metal in order to buy in itself metal then we feel we cannot take that the x of the currency and ongoing effects of that activity applicable, I can exclude it.

It’s also by the human nature of the metal market business.

Okay, so that is an active position?

Yes.

Okay.

That was an active position.

Your meaning doing core?

That is yes. Then you are optimizing our factory, but that is an active position.

Okay. Can I switch on the other one then as well so translation effect of the Brazilian balance sheet, it looks like you put that through as a financial item, and again is that included or excluded from the underlying items?

That is excluded from that.

That is excluded. Okay.

The cost, the nature of the business in both on aluminum and Primary Metals is not to take the active positions; it is to produce themselves at a typical lesson.

Excellent okay, thanks. I just want to clarify and then just a quick question on the aluminum market in general.

Do you have any comments on the complaints that we’re hearing from users of the aluminum about an artificial type in the aluminum market being created by restrictions on load out from aluminum warehouses?

I don’t have a specific comment on that. Just to confirm that for example what we see in North America is affected by their limitations on that related to the physical market with the locking of metal in the warehouses and financial transactions.

So, we see the effect of it. That’s correct.

So you think the premiums would be lower if we didn’t have these load out restrictions in effect?

Since they are – statistical metal in (inaudible) if that’s more accessible into their physical market, I would expect that this could impact their margins aimed on income premiums.

Maybe we should add that this is changing from time-to-time. Even there has been – there has been significant peers where that picture has looked totally different in that space.

So obviously there is a relationship between a tight market and high margins, but they’ve done a very different picture as well and fortunately at least in the aluminum business, there is a high degree of liquidity and a product that gets to fairly develop a system for trading metal and for sourcing natural coke, so that’s a big part and then right now may be some (inaudible).

Okay thank you.

Well I just would like to continue with the warehouse question, they’ve doubled the load out sector from the – April next year to 3000 tons from 1500 and still general and others are complaining that is not enough. What could you advice those companies to provide you all or have to produce this directly and avoiding the warehouses or what?

And second, totally different, you have occupied of course with Qatalum and with Sunndal, do you need collecting away other possibilities to grow like for example the pre-sold aluminum business to the Japanese guys, wouldn’t that have been to something for Hydro?

Yes, we’re going to go through again and comment on warehouses. I think there is maturity in the marketplace.

There is of course big volumes in financial transactions and I would not be surprised if it’s acquisition that financial view going forward. So, that should be an event of the release some of the metal, but you should also note that we are putting off somebody who got that cannot be used for anything else.

And there is also limiting capacity in the value chain or limiting is now possible. Hydro is one of the few companies with excess capacity for limiting, so it will be a new business result.

So, at least we could -this acquisition opportunity that we are not expecting us and nothing can be done in the market, but of course there is balance.

Maybe you can look for .

You can share (inaudible).

I think you are right in the sense that we are concentrating heavily on Qatar, reporting the local management in Qatalum and also on the Vale asset. In addition to the $300 program maybe we should do that also on the list, which in total implies quite a significant growth in Hydro right now.

So yes we had growth and we are occupied with making a good numbers out of that. I think we don’t miss opportunity as such because obviously we’re paying prices for what is happening, but you have to make authority then and right now we think it makes sense to concentrate on bringing the values after what we have done rather than to run after new issues.

Right.

So we’ve concentrated for good.

Okay thanks. Rob Clifford, Deutsche Bank.

Just two questions, one on simply on Alunorte, what do you spot to get either costs with the current plan before expansion, we are ready whether if you could take that. The second one is on strategy, so you sold your power business, you’ve written down solar business and made a comment that you won’t be buying any more there.

Is this the final custom being in energy supply and now you’re producing energy for what do you mean is a strategic positioning?

If you think about what we are now doing in Alunorte, this is a huge 10 year process plant and I actually mentioned previously that Hydro has 105 years’ experience in chemical cost efficiencies and we are using our capabilities and our competence to improve. We have all the dimension that we can see potential with reactive maintenance, we’re changing from reactive maintenance to productive maintenance, we have set the license, the production in a sense that we are also using the variations.

They should increase of the actions that we can put (inaudible). I think our ambition is to raise volumes further in Alunorte and that will of course drive cost.

We see that there is some need to improve the maintenance and I think the maintenance we will probably think we are now going to increase the cost, but we think that’s a good investment to reduce the cost. So that is the balance we are not going in to do the maintenance on – that we do maintenance that we do the thing more systematically and improve the EBIT – improve volumes and reduce the cost.

If you go to the solar business, we as Svein said we don’t see EBIT at strategic area of the business will continue to develop. We have some positions there.

We are more interested in implementing solar business in our building system solutions that we don’t necessarily to produce the photovoltaic solution that we are now in. We have developed for managing new building solutions, so we are using solar on that and we are confused and we don’t produce the including systemic.

I also think that – I’ll tell you about this is – that the sale of energy sharing is 100% share of our production company and that was the financial event, not taking for a historical reasons we held our position. And waiting up the dividend payments and if you could get I mean we made scientific relieve we could now – we are at the same time over these years and that’s being opting over a half billion in our core power portfolio, so we will continue both for our own new – and also to participate into liquid power markets and we will continue to develop our power assets.

So that’s part of the real industrial strategy have not changed at all as you can find in the conference.

(Inaudible) Metropolitan. Can you somewhat – is your policy on like Bauxite & Alumina, are you hoping to become a private global supplier of alumina as well as aluminum, as well as see yourself?

I’d say this is a global market. The alumina market is relatively a low global market and positioning – the gains will be among the companies with a biggest loan position in aluminum.

We will also develop our success, have over 100% more original capacity in order to use in our production. So we have also put back that physical from (inaudible) actually go to – although we are – at least at 3015 Brazilian – free volumes of alumina.

(Inaudible) from Citi. Another question on the strategy, I was just wondering in terms of your investment in Brazil into extrusions, what’s your endgame is there, and what you hope to achieve truly the extrusion business in Europe has been tough particularly in building constructions, I was just wondering, what you hope to achieve really in Brazil, is that more on the Altos side of it that should been going into?

And then maybe a second question, just following up on alumina, I know that you said that really you are not selling into the spot market now, and you don’t know think you’re going to sell into the spot market for a couple of years. I am just wondering whether you have actually sell forward high capacity say out of Alunorte, are you doing any sort of risk that you might have to go into the spot market to make those contract needs?

If you go to the extrusion investment in Brazil it’s very much due to the positive development we have experienced in Brazil. This is a fast growing market with good margins.

We see a pure demand in parallel segments that we’ll probably hit the high added value segment, which needs capabilities to produce liable and loan growth profiles targeted at the transport market investment. This is interesting market for us, we have to use the exposure in precision tubing market in Brazil, which also is targeting the automotive business and we are also in other parts of the high volume acquisition businesses markets in Brazil.

If you go to Alunorte connection, we are – we don’t have a look at everything that account in capacity because we are going to ignore the context of that delay to go from dollar, so that we are trying to shift in not very much available volumes, but from a category standpoint we have increased in higher volumes from our facility for commercially.

And we have a quite comprehensive alumina portfolio in addition to what they acquired. We were in a balanced situation with alternative equity plus the long-term contract that we have.

We feel we’re very comfortable alumina acquisition and we are doing some contract in the short line there and selling on the index (inaudible) and then certainly by saying more volumes, but I hope you got I think the risk is the way you phrase the question.

(Inaudible) from JPMorgan. Do you expect China to remain a balanced market for primary aluminum with probably new capacity that is coming online that is in the second half of the year and next year?

Sure. It seems that China has that tradition to develop.

Little more sales, I am not – I would any different, but I think that’s actually building up for capacity according to do none, but it’s what they are running.

I know it’s rather an important than the next one.

Yes.

Any further questions? We have some questions on the end, but I think I have been basically (inaudible) the questions that have been answered here.

That must complete the second quarter presentation. Thank you for your participation.

Thank you.

Thank you.