Norsk Hydro ASA

Pål Kildemo – Head, IR Svein Richard Brandtzaeg – CEO

Amit Pansari – Société Générale

Thank you. Good afternoon and welcome to Hydro’s third quarter 2014 conference call.

We will start with a short introduction by President and CEO, Svein Brandtzaeg followed by a Q&A session, where also CFO Eivind Kallevik will join. For those that did not receive this morning’s webcast of the results presentation, this is available at hydro.com.

And with that, I leave the word to you, Svein.

Thank you, Pål and good afternoon. A brief summary of the third quarter results before we open up for the questions.

As you have seen the underlying EBIT is NOK 1.49 billion, up NOK 946 million from the second quarter and up NOK 832 million from the third quarter last year. The increase from the second quarter was moderately driven by an increase in the all-in metal price lifting results from our primary metals as prices increased by 13% in Norwegian kroner terms.

In addition increase in the alumina price lifts over realized alumina price through the [inaudible] which still accounts for 75% of our contract portfolio. I’m very pleased to announce that the effects From B to A improvement program in Bauxite & Alumina are coming true.

The bottom line as maintenance costs following the power outages are coming down. And we can observe a reduction in cost in our [inaudible] third quarter a continuation of the B to A program was a high priority and you should continue to expect positive developments even in this business setting.

Energy prices in Southwestern Norway increased by almost 50% from the second quarter, which contributed positively but was somewhat offset by lowest [inaudible]. We have lifted our expectation for primary aluminum demand growth that we built outside China from 2% to 4%, to 3% to 4% for this year and so far we have seen 3.5%.

Demand [audio gap] China the markets continued to be tight and the effects are very visible in this quarter’s results. If we sum up with our main priorities and outlook going forward then into the fourth quarter, we will continue to lift production of our bauxite mine and Paragominas mine and we finally Alunorte.

Developments so far in October are positive and we should see the effects of this at the fourth quarter reporting. Improvement efforts continue and we should continue to receive bottom line effects going forward specially for the Bauxite Alumina business area, but also from other equipment programs, the employ programs for the order venture and the client program are contributing to the bottom line.

Finally, we continue to pleasantly observe the situation in the primary market where demand is exceeding production and we are continuing with an active margin management and showing we are getting most valued core metal. I will also remind you Capital Markets Day which is taking place at 27th and 28th of November and I hope to see as many of you as possible over there.

So with that Pål, we are ready for the questions.

Thank you, Svein. Operator, we are ready for questions.

Thank you. On the aluminum division, if we – cash flow you still find it to be sustainable for the next two quarters?

And what was the biggest impact on cost reduction this quarter?

With regards to the cost reductions this quarter, it is very much related to maintenance. We have extraordinary maintenance costs due to the effect of that we lost current last year and we had to empty some of the production system which took several months and also the secondary effect of this that we had maintenance costs.

So this is one issue that we have now improved and resolved. So we will expect a lower maintenance costs going forward.

But of course in connection with B to A program there is also substantial demining that is including and we have also stopped to implement that, is a lot of factors so positivity will be a very important factor of all this. So again, there are several different areas of improvements that we are targeting, but obviously there is positivity and also maintenance this could be the main factors.

Thank you. And on investments this year I think you said earlier you’re looking for 4 billion and around 2 billion year-to-date.

Are you still looking for 4 billion or is it lower now?

We will give an update on Capital Markets Day but I think it is fair to say I can answer it on a round about way. It is probably more likely that we will have south of 4 billion or on the north side of 4 billion.

But the precise number we will give you the indication on Capital Markets Day.

Okay. And then last question on bauxite, you have grown production or you’re selling more on the market or is it just going internally?

The increased production that we will see I think fourth quarter compared to third will be for the most part consumed internally at the foundry. You should not expect to see any significant decrease or increase in the bauxite exports.

Okay. Thanks.

That’s all for me.

Hi. Thanks for taking my question and congratulations on a good set of results and also good to know that you are going to stay for quite some time in Hydro and we will be hearing you more often.

My first question here is on the hedging in the B&A segment. So am I correct to understand hedging again is booked in this segment?

And if that is so, what is the impact in the third quarter? And I would also like to understand the cost reduction is a part of it due to the higher commercial benefits from bauxite shipments that you’ve given the external market outside of Alunorte?

So those will be my questions.

Thanks, Amit I’ll try to answer hedging questions. The hedging would be around was roughly around 241 for the third quarter as it is for the rest of the year.

The spot exchange rate was pretty much close to that during the quarter so there were limited effects on the P&L for the third quarter. Okay and your question was on the B&A improvement program was it?

Right, right.

There are some impacts from bauxite but it’s not significant for the third quarter.

Okay. Fair enough.

And then one more question I was trying to calculate the [inaudible] and the underlying labels because you report underlying EBIT and net income and I see there is a substantial increase in minority interest in the third quarter compared to first and second quarter. So is that correct calculation and if that is so, because alumina earnings have improved I mean there is such a high level of minority interest alumina or aluminum division or where it’s coming from?

It is really coming out of two parts, part of it is coming off which is a significant improved earnings in the third quarter, part of it is coming out of the [inaudible] in Europe.

Okay. Thanks for clarification.

Okay. Then I would like to thank you for listening in today and thank you for your questions and we hope to see as many of you possible at our Capital markets Day at 27th and 28th of November.

Thank you.