Norsk Hydro Third-Quarter Profit Declines on Energy, Costs

Oct. 21 (Bloomberg) -- Norsk Hydro ASA, Europe's second- largest aluminum producer, said third-quarter profit slumped 97 percent as energy and raw-material costs gained. Profit from continuing operations slipped to 202 million kroner ($30.6 million) from 6.3 billion kroner a year earlier, Oslo-based Hydro said today in a statement. That missed the 581 million-krone median of five analyst estimates compiled by Bloomberg. Sales dropped 0.9 percent to 21.8 billion kroner. Hydro is among aluminum makers considering cutbacks after costs gained and the metal used in planes and beverage cans plunged. Russia's United Co. Rusal, the world's largest aluminum company, said last week 75 percent of producers in China, the U.S. and Europe aren't profitable at current prices. Rio Tinto Group and Alcoa Inc., the second and third-biggest, idled capacity on concern a global economic slowdown will curb demand. The lightweight metal fell to as low as $2,114.85 a metric ton on Oct. 16 in London after trading at a record $3,380.15 in July. The average price on the London Metal Exchange was $2,844 a ton in the third quarter, up 9 percent on a year earlier. Alumina, the raw material used to make aluminum, averaged $407.50 a metric ton in the third quarter, 17 percent more than a year earlier, according to spot price data from industry publication Metal Bulletin. Energy, which makes up more than 40 percent of the cost of producing aluminum, also gained. Natural gas futures averaged $9.985 per million British thermal units on the New York Mercantile Exchange, up 44 percent. The Norwegian krone averaged 5.37 against the dollar in the quarter, 7.2 percent lower compared with the same period a year earlier.