Elkem
Elkem's first-quarter operating revenues totalled NOK 2,708 million (NOK 2,433 million)1.
EBITA was NOK 217 million, down NOK 314 million compared with the same period last year. Losses on Elkem Power Trading and higher recognised costs at Elem Solar accounted for respectively NOK 183 million and NOK 50 million of the profit reduction.
EBITA for Primary Aluminium was down on last year's first quarter, mainly due to a stronger NOK against the USD and higher power costs. The average price of aluminium for three-month delivery on the London Metal Exchange (LME) in the quarter was USD 2,785 compared with USD 2,747 in the first quarter of 2007. Primary aluminium prices rose through the quarter from a level of USD 2,400 to a level of USD 3,000. A loss of NOK 61 million (NOK 108 million)1 on metal hedges was realised in the quarter. Delivered volume from the plants totalled 78,600 tonnes. The new anode factory in Mosjøen is still on a run up and had a negative impact on profit in the quarter.
The energy business reported EBITA of NOK 104 million (NOK 244 million)1 in the first quarter of 2008. EBITA from power production was satisfactory, but EBITA from trading was a negative NOK 54 million, which is NOK 183million less than in the same period last year. However, heavier precipitation and higher reservoir inflow than normal enabled hydropower production of 837 GWh by Elkem in Norway in the first quarter, 83 GWh higher than in the same period last year. Elkem's resource situation was stronger at quarter-end than is normal for the time of year. The system price on the Nordic market fell from 36.4 øre/kWh in January to 23.7 øre/kWh in March.
The silicon-related units reported somewhat weaker overall EBITA than in the first quarter of 2007 due to higher recognised costs at Elkem Solar and because last year's first-quarter profit included an extraordinary gain from the termination of a leasing contract at Elkem Chartering. The market for silicon and ferrosilicon metal strengthened further in the first quarter, mainly as a result of higher Chinese export taxes on metal products and the introduction of a permanent anti-dumping tax on ferrosilicon exported by a number of countries to Europe. The construction of the new industrial plant for Elkem Solar at Fiskaa in Kristiansand continued to make good progress in the quarter. Overall investment costs are expected to be as previously announced, and start-up is expected in the second half of 2008. Recognised costs for Elkem Solar in the first quarter were NOK 77 million. The calcium carbide business in Pryor in the US was sold in the quarter, providing a positive one-time effect of NOK 15 million.
An unappealable judgment was handed down in a lawsuit brought against Statkraft concerning the replacement of welded pipelines at Sauda. Elkem was awarded compensatory damages of NOK 210 million which for accounting purposes will show as a reduction in the investment in the ongoing hydropower development at Sauda.
1 The figures in brackets refer to the corresponding period of the previous year.
2 Excluding acquisitions, divestments and currency translation effects.
Elkem reports
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Elkem
- Elkem is one of the world's leading companies in the environment-friendly manufacture of metals and materials.
- Its main products are aluminium, energy, silicon metal, special ferrosilicon alloys for the casting industry, carbon and microsilica. Elkem has also invested heavily in the solar industry.
- The company has manufacturing facilities in Europe, North and South America, Africa and Asia, as well as a comprehensive network of sales offices and agents in the major markets.