By the OGJ Online Staff
LONDON, July 16 -- First-half earnings of more than 5.4 billion kroner set a record for Norsk Hydro AS, but could not mask a fall in the Norwegian oil and gas company's second quarter net income -- explained as partly the result of the US-led global economic slowdown.
Hydro CEO Eivind Reiten announced Monday that the company's net income in the second quarter was nearly 2.2 billion kroner, some 595 million kroner lower than the same period in 2000. The drop, he said, was due to "unfavorable market conditions" and write-offs linked to a program of downsizing and rationalization.
Earnings for the first 6 months of the year, however, up by 189 million kroner from the corresponding
"I am pleased that Hydro can deliver its best first-half earnings ever and that the second-quarter earnings are also at a high level. But the weak economic conditions in the US are affecting our markets, and these effects are also being felt in Europe," said Reiten.
"Improvement programs in our operations have produced results that partially offset these effects, but more initiatives are necessary if we are to reach our ambitious profitability goals," he added.
Reiten noted that Hydro decision to take a 30% stake in Block 34 off Angola, along with its acquisition of a share in Block 25, were "important steps" in the company's campaign to develop its international oil and gas activities.
Operating income for the second quarter was close to 6.1 billion kroner, 967 million kroner lower year-on-year, including 865 million kroner due to "write-offs for non-recurring items relating to these programs," said Reiten.
The company has cut its production forecast for the coming year to 415,000 boe/d from 435,000 boed.
