Norway's Hydro posts 73 pct Q2 profit tumble

OSLO – Norwegian aluminum supplier Norsk Hydro ASA on Wednesday reported a 73 percent plunge in second quarter profits, citing "historically" weak demand amid the economic crisis. Net profit fell to 211 million kroner ($33.5 million) in the second quarter, down sharply from 786 million kroner in the same period last year. The company has had to cut its production capacity significantly this year in response to a weak aluminum market. Hydro estimates that production in 2009 will be 26 percent of what it was in 2008, a 460,000-metric-ton reduction in primary metal output. "We remain cautious about the outlook for global aluminum demand ahead of the second half of the year, which is normally seasonally weaker than the previous six months," Hydro CEO Svein Richard Brandtzaeg said in a statement. Hydro shares closed up 2.6 percent to 33.69 kroner in Oslo. "The results were better than expected, and the reason for the good performance was mainly more heavy cost cutting than we'd expected," First Securities analyst Hans-Erik Jacobsen said. Jacobsen predicted that "with further cost cutting" Hydro's "profits will increase slowly but steadily." The aluminum concern estimates that by the end of the year it will have laid off 4,500 employees since the middle of 2008.