Norwegian industrial concern Norsk Hydro reported third-quarter net profits of NOK 2.39 billion on Tuesday. That compares to just NOK 513 million in the same period last year, but Hydro officials merely called the results “satisfactory.”
The characterization appears to be a prime example of Norwegian understatement. Net earnings per share jumped nearly five-fold, to NOK 9.30 from NOK 2 in the third quarter of 2002.
The sharp improvement was attributed mostly to strong results from Hydro’s oil and energy division and improvements in its aluminum and agricultural products divisions.
Operating profits hit NOK 5.73 billion, up 45 percent over last year. Hydro linked that improvement to higher oil and gas production and lower oil and gas exploration costs.
Hydro chief executive Eivind Reiten did allow himself some credit, noting that it was “particularly pleasing” that the oil and energy profits were “based on strong production growth and good cost control,” not just high oil and gas prices.
Start-up of the new Grane and Fram Vest fields was said to be on-schedule and well below budget. Reiten said the fields “demonstrate our ability to manage large, complex development projects.”
He also said Hydro was adjusting upwards its estimates for this year’s oil and gas production, from 510,000 to 520,000 barrels of oil equivalents per day. Production during the third quarter was up 8 percent over last year.
Reiten also cited improvements in its aluminum business and positive developments in fertilizer markets. Hydro intends to spin off its agricultural products unit, know as Agri, as a separate listed company.