Elkem’s first quarter operating revenues totalled NOK 2,433 million. Operating profit before amortisation was NOK 531 million, up NOK 119 million compared with the first quarter of last year.

Profit for Primary Aluminium was slightly lower than in the first quarter of 2006, mainly due to higher raw material costs and a reduced contribution from USD hedges. The average price of aluminium for three-month delivery on the London Metal Exchange (LME) was USD 2,747 in the first quarter, compared with USD 2,443 in the first quarter of 2006. Delivered volume was 82,000 tonnes. A loss of NOK 108 million on metal hedges was realised in the first quarter. At the beginning of the second quarter of 2007, primary aluminium prices are still high and higher than the average price for the first quarter. The market is expected to remain strong in the second quarter.

The energy business again achieved strong profit in the first quarter of 2007, mainly driven by good trading results. Elkem’s hydropower production in Norway was 754 GWh, 43 GWh lower than in the same period last year. Precipitation levels were well above average in both Northern and Western Norway. The system price on the Nordic market dropped from 27.3 øre/kWh in December to 19.4 øre/kWh in March. At the end of the first quarter, Elkem’s resource situation in the form of reservoirs is significantly stronger than normal for the time of year and elsewhere in Norway. Elkem’s investment in the development of Saudefaldene will be more expensive than originally planned. Weaker rock, with significantly larger water pockets than could have been expected on the basis of previous development and feasibility studies, will lead to a rise of around NOK 400 million in investment costs. However, the profitability of the project is still good and it will largely proceed according to the original schedule.

Profit from the silicon-related units was significantly better than in the same period last year. The market for silicon metal and ferrosilicon continued to be favourable in the first quarter, and is expected to remain so in the next three months. The other silicon-related units reported a good operating situation and profit growth. The construction of a new industrial plant for Elkem Solar at Fiskaa in Kristiansand made good progress in the first quarter and the level of activity has increased considerably as regards preparing the site and strengthening the organisation. The project is proceeding according to plan and is expected to be completed in mid-2008. Recognised costs for Elkem Solar were NOK -27 million in the first quarter (NOK -11 million)¹. As previously announced, expensed costs for the year as a whole are expected to be about NOK 100-150 million above 2006.



¹The figures in brackets refer to the corresponding period of the previous year.
²Excluding acquisitions, divestments and currency translation effects.