Severance arrangements and write-offs will be charged to accounts
Jun 26, 2001
Oslo (2001-06-26) Costs of MNOK 830 relating to severance arrangements and write-offs will be charged to the accounts for the second quarter 2001.
Since December last year, Norsk Hydro has conducted a comprehensive improvement process to increase earnings and improve competitiveness for the company's Grenland operations in Norway. In this connection, approximately 500 - 550 man years have been identified as being supernumerary.
A total of 415 employees have entered into agreements regarding different forms of severance arrangements. The costs related to the severance arrangements amount to approximately MNOK 660, and will be charged to the accounts for the second quarter of 2001. MNOK 180 of this amount will be charged to the accounts of the Plant Nutrition segment, MNOK 105 to Magnesium, MNOK 75 to Petrochemicals and the remaining MNOK 300 to Other Activites.
Hydro aims to find alternative work for the employees for whom no solution so far has been found. In some parts of the group, there is a need for increased manpower.
As part of the program to improve profitability at plant level in Porsgrunn, Hydro has decided to close down the production of potassium nitrate that over time has shown poor profitability. This will involve a write-off of 75 mill NOK within Hydro Plant Nutrition, while the provisions for demanning are covered by the above mentioned accrual.
The improvement program Hydro Agri Turnaround has enabled the identification of a considerable increased efficiency potential through an alteration of the logistics and distribution system in the United Kingdom. The alteration will entail a workforce reduction of 85 people. Total non-recurring expenses will amount to MNOK130, the substance of which consists of a write-off of non-current assets in the stock and distribution chain.
The mentioned non-recurring costs, amounting to MNOK 865 in total, will be charged against Hydro's second quarter operating income. Approximately MNOK165 consists of a write-off of non-current assets.
Certain statements in this press release are or may constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not in the nature of historical facts may be deemed to be forward-looking statements and may contain identifying words such as "believes", "anticipates", "plans", "expects" and similar expressions. These forward looking statements are based on Hydro's current expectations, assumptions, estimates and projections about the company and the industries in which it engages in business. All forward-looking statements involve risks and uncertainties. For a detailed description of factors that could cause Hydro's actual results to differ materially from those expressed in or implied by such statements, please refer to its annual report on Form 20-F for the year-ended December 31, 2000 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission.