Sapa’s financial results improve in fourth quarter
Sapa’s financial result, as measured in EBIT, increased in the fourth quarter of last year, compared to the same quarter of 2013.
The improvement was due to stronger demand for extruded aluminium solutions in North America, better product margins, improvement programs, and restructuring activities in Europe.
The demand for extruded aluminium products is subject to seasonal variations, and fourth-quarter demand typically is weaker than in the other quarters. In North America, demand for extruded products in the fourth quarter increased by 9 percent compared to the same quarter of the previous year, as a result of increased building and construction activity and strong automotive demand. In Europe, extruded products demand was stable overall, compared to the same quarter of the previous year, when a weaker building and construction market was offset by growth in other segments.
The demand for extruded products is expected to seasonally improve in the first quarter of 2015.
Better than Q4 2013
Underlying EBIT for Sapa increased in the fourth quarter of last year, compared to the same quarter of 2013. This was due to stronger North American demand, improved margins, improvement programs, and restructuring activities in Europe. Global automotive demand supported the improved results in Sapa’s aluminium tubing business.
Sapa’s results in the fourth quarter of 2013 included charges related to impairment of inventories and accounts receivable. The restructuring program initiated by the company in 2013, targeting annual synergies of around NOK 1 billion by the end of 2016, is ahead of plan. About half of the ambition was reflected in Sapa’s underlying results for the full year 2014.
Reported EBIT in Q4 also was impacted by items related to restructuring activities undertaken to deliver on the improvement and restructuring agenda.
In addition to items related to the improvement and restructuring agenda, reported EBIT included approximately NOK 0.5 billion in impairment of fixed assets in China.