NOK 1,110 million in second quarter underlying EBIT

*
Solid demand in seasonally strong quarter

*
Upstream improves on higher aluminium prices and alumina performance

*
Downstream rises further with strong sales, firm margins and improved productivity

*
Energy falls on significantly lower power production

*
Qatalum ramp-up on schedule for full output in Q4, 48 percent of cells in operation
end-Q2

*
Takeover of Vale’s aluminium business on track for Q4 closing

*
NOK 10 billion rights offering successfully completed

*
2010 outlook for growth in Hydro’s main markets unchanged at 12 percent

Hydro had underlying earnings before financial items and tax of NOK 1,110 million in the
second quarter, rising from NOK 688 million in the first quarter. Higher realized
aluminium prices, continued improvements in alumina operations and higher downstream
sales lifted underlying results for the quarter.

“The solid results are attributable to higher sales volumes, combined with firm margins
and tight cost control in a seasonally strong quarter. This quarter confirms Hydro as a
strong market performer,” Hydro’s President and Chief Executive Officer Svein Richard
Brandtzæg said.

“Full output at Qatalum and closing of the takeover of Vale’s aluminium business are
expected in the fourth quarter. Combined, these moves will strengthen Hydro in all parts
of the value chain and make us an even more robust player in an industry poised for
growth,” said Brandtzæg.

Underlying results for Primary Metal improved during the quarter compared to the first
quarter, due to higher realized aluminium prices. Hydro’s alumina and raw materials
business showed improved underlying results, mainly due to the Alunorte alumina refinery
which posted higher sales volumes as a result of more stable production. Variable costs
increased for Hydro’s smelter operations during the quarter.

Metal Markets’ underlying results declined in the second quarter, mainly due to an
increase in negative currency effects as a result of the weakening Euro against the US
dollar. Capacity utilization and margins remained firm in the quarter despite increased
raw material costs.

Underlying EBIT for Rolled Products increased substantially compared to the first
quarter, mainly driven by higher sales volumes. Higher margins and lower operating costs
per tonne also contributed to the improved underlying results. Extruded Products also
delivered significantly better underlying results on seasonally higher volumes and firm
margins in all business sectors.

Underlying EBIT for Energy decreased substantially compared to the previous quarter due
to significantly lower hydropower production.

The ramp-up of the Qatalum aluminium plant in Qatar continued during the quarter with
about 48 percent of the 704 cells operating at the end of June 2010. Production from the
plant’s remaining cells will be phased in during 2010 and the ramp-up is expected to be
completed in the fourth quarter this year.

Net cash generated from operating activities amounted to NOK 1.6 billion for the
quarter. Investments amounted to NOK 1.3 billion, including about NOK 740 million
relating to Qatalum. Qatalum investments are expected to be somewhat lower in the second
half of 2010 compared with the first half, as the project nears completion. Hydro’s net
debt amounted to NOK 0.1 billion at the end of the quarter.

On 2 May 2010, Hydro announced an agreement to take over the majority of Brazilian
metals and mining company Vale’s aluminium business. The transaction is expected to
close in the fourth quarter 2010. In order to mitigate the risk of a weaker aluminium
price and secure a robust cash flow, Hydro has hedged the majority of the net aluminium
price exposure in the acquired business until the end of 2011 at about USD 2,400 per mt.

To partly finance the transaction, support the company’s investment grade rating and
capacity to implement future projects, Hydro launched a rights offering to strengthen
its equity by NOK 10 billion. The rights offering was successfully completed with the
proceeds received by Hydro on 16 July, and the new shares delivered to the subscribers
and admitted to trading on the Oslo Stock Exchange and London Stock Exchange on 19 July.
For further information about the transaction and the rights offering, please refer to
the Information Memorandum and Prospectus dated June 2, 2010 and June 21, 2010
respectively.

Key financial information Second First % change prior quarter Second % change prior year quarter First First Year

NOK million, except per share data quarter quarter quarter half half 2009
2010 2010 2009 2010 2009

Revenue 19 779 18 145 9 % 17 617 12 % 37 924 34 186 67 409

Earnings before financial items and tax (EBIT) 1 157 985 17 % 410 >100 % 2 142 (1 188) (1 407)
Items excluded from underlying EBIT (47) (297) (1 029) (344) 77 (1 148)
Underlying EBIT 1 110 688 61 % (618) >100 % 1 798 (1 111) (2 555)

Underlying EBIT :
Primary Metal 657 (49) >100 % (895) >100 % 607 (1 079) (2 556)
Metal Markets 31 65 (52) % 196 (84) % 96 (48) (83)
Rolled Products 309 223 39 % (28) >100 % 532 (82) 26
Extruded Products 201 117 72 % (26) >100 % 318 (230) (67)
Energy 177 588 (70) % 281 (37) % 766 728 1 240
Other and eliminations (265) (255) (4) % (146) (81) % (520) (400) (1 114)
Underlying EBIT 1 110 688 61 % (618) >100 % 1 798 (1 111) (2 555)

Net income (loss) 598 924 (35) % 282 >100 % 1 523 2 416

Underlying net income (loss) 530 401 32 % (572) >100 % 931 (1 052) (3 066)

Earnings per share 0.40 0.68 (42) % 0.17 >100 % 1.08 (0.11) 0.24

Underlying earnings per share 0.34 0.27 26 % (0.51) >100 % 0.61 (0.94) (2.50)

Financial data:
Investments 1 261 1 766 (29) % 765 65 % 3 028 1 450 5 947
Adjusted net interest-bearing debt (18 191) (16 939) (7) % (19 236) 5 % (18 191) (19 236) (15 645)

Key Operational information

Primary aluminium production (kmt) 362 339 7 % 338 7 % 701 735 1 396
Realized aluminium price LME (USD/mt) 2 200 1 997 10 % 1 468 50 % 2 099 1 727 1 698
Realized aluminium price LME (NOK/mt) 13 302 11 542 15 % 9 598 39 % 12 401 11 456 10 764
Realized NOK/USD exchange rate 6.05 5.78 5 % 6.54 (7) % 5.91 6.63 6.34
Metal Markets sales volumes to external market, 457 414 10 % 375 22 % 871 695 1 468
excl. ingot trading (kmt)
Rolled Products sales volumes to external market (kmt) 242 231 5 % 187 30 % 473 378 794
Extruded Products sales volumes to external market (kmt) 141 128 10 % 112 26 % 269 218 453
Power production (GWh) 1 621 2 781 (42) % 1 809 (10) % 4 402 4 286 7 897

1 809

(10) %

4 402

4 286

7 897

About Hydro’s reporting
To provide a better understanding of Hydro’s underlying performance, the following
discussion of operating performance excludes certain items from EBIT (earnings before
financial items and tax) and net income. See “Items excluded from underlying EBIT and
net income” for more information on these items.

Reported EBIT and net income
Reported EBIT for Hydro amounted to NOK 1,157 million for the second quarter of 2010
including net positive effects of NOK 47 million comprised of net unrealized derivative
losses of NOK 292 million, positive metal effects of NOK 206 million and other positive
effects of NOK 133 million, mainly related to changes in pension plans in Norway.

In the previous quarter, reported EBIT for Hydro amounted to NOK 985 million including
net positive effects of NOK 297 million comprised of net unrealized derivative losses of
NOK 42 million, positive metal effects of NOK 314 million and other positive effects of
NOK 25 million.

Net income amounted to NOK 598 million in the second quarter including net foreign
exchange gains of NOK 151 million relating to intercompany balances denominated in Euro.
These gains have no cash effect and are offset in equity by translation of the
corresponding subsidiaries during consolidation. In the first quarter, net income
amounted to NOK 924 million including net foreign exchange gains of NOK 515 million
relating to intercompany balances denominated in Euro.

Market developments and outlook
Average LME three month prices declined during the second quarter and ended with the LME
three month price at USD 1,954 per mt.

Global demand for primary aluminium excluding China strengthened in the second quarter
reaching an annualized consumption of around 24 million mt. Production outside China
increased to 25 million mt on an annualized basis. Demand for primary aluminium in China
increased from the previous quarter to around 17.6 million mt on an annual basis.
Production was relatively stable at around the same level resulting in a balanced market
during the quarter.

LME stocks declined somewhat to around 4.4 million mt at the end of the second quarter
compared to 4.6 million mt in the beginning of the quarter.

Demand for metal products (extrusion ingot, sheet ingot, foundry alloys and wire rod)
during the second quarter continued above levels experienced in the same quarter of last
year.

Consumption in the European flat rolled product market improved by 5 percent in the
second quarter of 2010 compared with the previous quarter. Order levels have remained
firm, reflecting growth in end use demand compared to 2009. Demand in the North American
market showed similar developments. Demand is expected to be stable in the third quarter
but with a normal seasonal decline.

European demand for extruded aluminium products declined slightly from the first quarter
which was influenced by customer restocking. North America experienced a seasonal
increase in demand compared with the first quarter of 2010 and the weak second quarter
of 2009 and the market appears to be improving following a long period of continuous
decline. Market demand in South America continued to be positive, mainly in Brazil.

On a combined basis we continue to expect demand in our main upstream and downstream
markets to grow around 12 percent in 2010.

Nordic electricity spot prices decreased during the second quarter due to a decline in
demand following a record cold winter. Dry spring weather in Southern Norway has
resulted in lower reservoir levels in this region than in Northern Norway and Sweden.
Power production is expected to be lower than normal until reservoir levels are
normalized.

Additional factors impacting Hydro
Hydro has sold forward substantially all of its primary aluminium production for the
third quarter of 2010 at a price level of around USD 2,175 per mt, excluding expected
Qatalum production.

Qatalum will continue incurring operating losses during the ramp-up of production.
Qatalum prices production with a one month lag to LME prices. As a result, declining
aluminium price during the second quarter 2010 is expected to negatively affect
Qatalum’s results in the third quarter of 2010. High depreciation relative to actual
production is also expected to impact results for the quarter.

Underlying results for Hydro’s Alumina and raw materials business are expected to
decline in the second half of 2010 as a result of lower expected realized alumina prices
due to a lower LME, and higher raw material costs due to time-lag effects in the pricing
formula for bauxite which is partly linked to LME prices. In addition, a decline in the
results for alumina commercial activities is expected in the second half of 2010 from
the strong performance in the first half of 2010. The decline is due to lower expected
margins.

Low snow accumulations in Southern Norway have resulted in a low replenishment to
Hydro’s reservoirs. As a result, power production is expected to remain at a low level
in the third quarter unless there is a higher than normal level of precipitation.

During 2009, Hydro curtailed production capacity and reduced production at several
plants. If it becomes necessary to permanently close plants that have been curtailed on
a temporary basis, additional substantial closure costs will be incurred.

The risk of counterparty default continues under the present economic conditions. So far
we have not experienced any significant defaults and are carefully monitoring the
situation.

Primary Metal
Underlying results for Primary Metal improved during the quarter compared to the first
quarter due to higher realized aluminium prices and improved performance in Alumina and
Raw Materials.

Alumina and Raw Materials’ underlying EBIT increased further in the second quarter from
the improved performance in the first quarter. Underlying results improved significantly
for Alunorte mainly due to higher sales volumes as a result of more stable production.
Realized alumina prices were relatively unchanged during the quarter while operating
costs declined somewhat. Underlying results were positively impacted by a settlement of
a claim for business interruption insurance.

Underlying results for alumina commercial activities improved in the quarter following a
strong performance in the first quarter mainly due to higher volumes on external
contracts. Margins remained good but declined somewhat from the previous quarter.
Underlying EBIT was positively influenced by unrealized gains on LME forward contracts.

Underlying results for Primary Aluminium improved significantly in the second quarter
with higher realized aluminium prices contributing roughly NOK 600 million compared with
the previous quarter. Higher sales volumes and product premiums also made a positive
contribution to underlying EBIT for the quarter.

Variable costs increased by roughly NOK 120 million during the quarter mainly due to
higher alumina costs and somewhat higher power costs. Other costs were overall stable.

Underlying results for Qatalum improved slightly, but were still negative due to a
substantial increase in depreciation charges combined with low output during ramp-up of
production at the plant.

Metal Markets
Underlying EBIT for Metal Markets declined in the second quarter mainly due to an
increase in negative currency effects as a result of the weakening Euro against the US
dollar. Negative currency effects amounted to about NOK 140 million in the second
quarter compared with negative effects of approximately NOK 100 million in the previous
quarter.

Underlying results from remelt operations declined slightly compared to the first
quarter. Positive effects from higher production and sales volumes were offset by higher
raw material costs.

Total metal sales from own production and third party contracts increased significantly
compared with the first quarter of 2010 mainly due to seasonally higher shipments of
extrusion ingots in all markets and increased sales from Qatalum.

Underlying results for our metal sourcing and trading operations were largely unchanged
from the first quarter, with good operating performance and positive results in both
periods.

Rolled Products
Underlying EBIT for Rolled Products increased substantially compared to the first
quarter mainly driven by higher sales volumes. Higher margins and lower operating costs
per mt also contributed to the improved underlying results.

Shipments improved across all market segments except for lithographic sheet which was
stable. Beverage can shipments improved by 11 percent supported by continued good market
demand. Automotive products shipments increased by 8 percent influenced by a continued
strength in the market for premium cars. Shipments of thin gauge foil products improved
7 percent compared to the first quarter, mainly driven by strong demand in the liquid
packaging market. General engineering shipments increased by 5 percent.

Cost focus continued and cost per mt declined further compared to the first quarter.
Labour productivity also improved further compared to the first quarter of 2010 and was
above the level achieved in 2008 even though volumes were below 2008 levels.

Extruded Products
Underlying results for Extruded Products improved from the first quarter of 2010 due to
seasonally higher volumes and stable margins in all business sectors.

Sales volumes for our extrusion operations in Europe and the Americas increased
significantly from the previous quarter mainly as a result of stronger seasonal demand.
Volumes for our building systems operations were also seasonally higher compared with
first quarter, but the recovery of the building and construction market segment is slow
compared to other market segments. Our precision tubing business delivered somewhat
higher volumes compared to the previous quarter supported by a continued strong demand
from the automotive segment. Margin and cost developments were stable for all sectors
compared to the previous quarter.

Energy
Underlying EBIT for Energy decreased compared to the previous quarter due to
substantially lower production. The corresponding reduction in net spot sales had a
negative impact on underlying EBIT amounting to NOK 565 million. High realized spot
prices, low area price differences and lower transmission costs offset the negative
impact to some extent.

Other and eliminations
Underlying EBIT for Other and eliminations amounted to a charge of NOK 265 million in
the second quarter compared with a charge of NOK 255 million in the previous quarter.
Underlying EBIT includes the elimination of internal gains and losses on inventories
purchased from group companies which amounted to a charge of NOK 85 million in the
second quarter compared with a charge of NOK 116 million in the previous quarter.

Hydro’s solar activities incurred an underlying loss of NOK 47 million in the second
quarter compared with a loss of NOK 25 million in the previous quarter.

Underlying EBIT for Other and eliminations in the second quarter also included costs
related to the acquisition of Vale’s aluminium operations amounting to about NOK 50
million.

Items excluded from underlying EBIT and net income
To provide a better understanding of Hydro’s underlying performance, the items in the
table below have been excluded from EBIT and net income.

Items excluded from underlying EBIT are comprised mainly of unrealized gains and losses
on certain derivatives, impairment and rationalization charges, effects of disposals of
businesses and operating assets, as well as other items that are of a special nature or
are not expected to be incurred on an ongoing basis.

Linked to the agreement to acquire the majority of Vale’s aluminium businesses in Brazil
(Vale Aluminium) it was decided to hedge the majority of the net aluminium price
exposure in Vale Aluminium until end 2011. The hedges are aimed at mitigating the risk
of a weaker aluminium price and will secure a robust cash flow from the acquired assets
in the transition phase. The hedges are not conditional upon completion of the
transaction. The significant part of the positions expiring after closing of the
transaction are subject to hedge accounting and included in other comprehensive income.
Recognized unrealized and realized effects of positions not subject to hedge accounting
are classified as items excluded from underlying EBIT.

During second quarter some of Hydro’s Norwegian employees accepted an offer of
transferring their pension agreements from a defined benefit plan to the new defined
contribution plan. The transition resulted in curtailment and settlement gain of the
funded plans related to these employees. The recognized gain has been excluded from
underlying EBIT.

Items excluded from underlying net income Second First Second First First Year

NOK million quarter quarter quarter half half 2009
2010 2010 2009 2010 2009

Unrealized derivative effects on LME related contracts 389 (253) (1 223) 136 (496) (2 630)
Derivative effects on LME related contracts (Vale Aluminium) (320) – – (320) – -
Unrealized derivative effects on power contracts 211 272 118 483 (463) (198)
Unrealized derivative effects on currency contracts 12 23 (204) 35 (223) (345)
Metal effect, Rolled Products (206) (314) 225 (520) 887 588
Significant rationalization charges and closure costs 18 (19) 117 (1) 423 518
Impairment charges (PP&E and equity accounted investments) – 61 4 61 14 438
Pension (151) – – (151) – (52)
Insurance compensation – – (66) – (66) (152)
(Gains)/losses on divestments – (67) – (67) – 684
Items excluded from underlying EBIT (47) (297) (1 029) (344) 77 (1 148)
Net foreign exchange (gain)/loss (59) (468) (88) (527) (1 566) (2 774)
Calculated income tax effect 38 241 262 279 436 441
Items excluded from underlying net income (68) (523) (854) (592) (1 054) (3 481)

(854)

(592)

(1 054)

(3 481)

Finance
Financial expense amounted to NOK 97 million in the second quarter compared with
financial income of NOK 545 million in the previous quarter.

In the second quarter, currency gains on intercompany balances denominated in Euro
amounted to NOK 151 million, due to a weaker Euro against the Norwegian kroner. These
gains have no cash effect and are offset in equity by translation of the corresponding
subsidiaries during consolidation. Other net currency losses amounted to NOK 92 million.

In the previous quarter, currency gains on intercompany balances denominated in Euro
amounted to NOK 515 million due to weaker Euro against the Norwegian kroner.

Tax
Income tax expense amounted to a charge of NOK 462 million in the second quarter
compared with a charge of NOK 605 million in the previous quarter and a charge of NOK
273 million in the second quarter of 2009. Tax expense in the second quarter included
approximately NOK 30 million relating to tax claims in Germany.

For the first half of 2010 income tax expense was roughly 41 percent of pre-tax income.
The tax rate is influenced by the effects of power sur-tax and results from equity
accounted investments which are recognized net of tax.

Investor contact
Contact Stefan Solberg
Cellular +47 91727528
E-mail Stefan.Solberg@hydro.com mailto:Stefan.Solberg@hydro.com

Press contact
Contact Halvor Molland
Cellular +47 92979797
E-mail Halvor.Molland@hydro.com mailto:Halvor.Molland@hydro.com

*********
This announcement is not an offer for sale of securities in the United States or any
other country. The securities referred to herein have not been registered under the U.S.
Securities Act of 1933, as amended (the “U.S. Securities Act”), and may not be sold in
the United States absent registration or pursuant to an exemption from registration
under the U.S. Securities Act. Any offering of securities will be made by means of a
prospectus that may be obtained from Hydro and that will contain detailed information
about the company and management, as well as financial statements. Copies of this
announcement are not being made and may not be distributed or sent into the United
States, Canada, Australia, Japan or any other jurisdiction in which such distribution
would be unlawful or would require registration or other measures.

In any EEA Member State that has implemented Directive 2003/71/EC (together with any
applicable implementing measures in any member State, the “Prospectus Directive”), this
communication is only addressed to and is only directed at qualified investors in that
Member State within the meaning of the Prospectus Directive.

This announcement is only directed at (a) persons who are outside the United Kingdom; or
(b) investment professionals within the meaning of Article 19 of the Financial Services
and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (c) persons
falling within Article 49(2)(a) to (d) of the Order; or (d) persons to whom any
invitation or inducement to engage in investment activity can be communicated in
circumstances where Section 21(1) of the Financial Services and Markets Act 2000 does
not apply.

Certain statements included within this announcement contain forward-looking
information, including, without limitation, those relating to (a) forecasts, projections
and estimates, (b) statements of management’s plans, objectives and strategies for
Hydro, such as planned expansions, investments or other projects, (c) targeted
production volumes and costs, capacities or rates, start-up costs, cost reductions and
profit objectives, (d) various expectations about future developments in Hydro’s
markets, particularly prices, supply and demand and competition, (e) results of
operations, (f) margins, (g) growth rates, (h) risk management, as well as (i)
statements preceded by “expected”, “scheduled”, “targeted”, “planned”, “proposed”,
“intended” or similar statements.

Although we believe that the expectations reflected in such forward-looking statements
are reasonable, these forward-looking statements are based on a number of assumptions
and forecasts that, by their nature, involve risk and uncertainty. Various factors
could cause our actual results to differ materially from those projected in a
forward-looking statement or affect the extent to which a particular projection is
realized. Factors that could cause these differences include, but are not limited to:
our continued ability to reposition and restructure our upstream and downstream
aluminium business; changes in availability and cost of energy and raw materials; global
supply and demand for aluminium and aluminium products; world economic growth, including
rates of inflation and industrial production; changes in the relative value of
currencies and the value of commodity contracts; trends in Hydro’s key markets and
competition; and legislative, regulatory and political factors.

No assurance can be given that such expectations will prove to have been correct. Hydro
disclaims any obligation to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian
Securities Trading Act)