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Norway's Hydro Loses $100M In 4Q

Norwegian aluminum producer said fourth quarter net loss narrowed to $100 million due to cost-cutting measures and a slight upturn in aluminum market.

OSLO (AP) -- Norwegian aluminum producer Norsk Hydro ASA said Wednesday its fourth quarter net loss narrowed to 587 million kroner ($100 million) due to cost-cutting measures and a slight upturn in the aluminum market.

That compared with a loss of 5.85 billion kroner a year earlier.

Quarterly revenue, meanwhile, dropped to 16.4 billion kroner ($2.8 billion) from 20.7 billion kroner in 2008.

Hydro shares slipped 3.2 percent, to 40.33 kroner ($6.89), in midday trading in Oslo.

The Oslo-based company said the curtailment of high-cost smelting operations and other "focused cost reductions" helped it cover "a substantial portion of the loss due to market downturn."

"We took firm control of our cost position and repositioned our company for future growth," CEO Svein Richard Brandtzaeg said.

The aluminum concern also said early signs of recovery in the still-weak aluminum market -- including an increase in prices and slightly higher demand -- contributed to the result.

"We have seen global aluminium markets gradually improving since reaching bottom early last year," Brandtzaeg said. But he warned that "the market situation continues to be demanding" and anticipated new cost-cutting measures in 2010.

Henrik Schultz, an analyst at Argo Securities, said the Hydro result was "significantly behind expectations." Schultz said the price of bauxite -- the primary aluminum ore -- and smelting costs rose more quickly than aluminum prices in the fourth quarter, counteracting downstream gains to a greater extent than analysts had anticipated.

The company gave a cautious outlook. It noted that aluminum prices were rising and that demand was growing in the vast Chinese market, but said that low aluminum demand in the U.S. and Europe may offset those improvements.

Hydro is a global aluminum producer, with 25,000 staff in more than 30 countries. Hydro estimates that it has laid off 4,500 employees since the middle of 2008.

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