Welcome to Hydro's presentation with the fourth quarter results. Also warm welcome to those of you following us on webcast. To present our results are CEO, Svein Richard Brandtzæg, and CFO, Eivind Kallevik. The presentations will be followed by a Q&A session here. Svein Richard, the floor is yours.
Thank you how much. Safety is always first priority in Hydro. It was with the great sorrow that I received the message the 14th of November that one of our colleagues had a fatal accident in our extrusion plant in Hungary. Of course, this is something we work very hard to avoid. We work every day to make sure that our employees can come home safely, and we want to make sure that they come home safely every day, always. Let us move on to the highlights from the quarter, which was underlying result of half a billion NOK, down from NOK 3.6 billion in the same quarter, 2017. We are now comparing our results with the same quarter, 2017, the fourth quarter.
It was also down from NOK 2.7 billion in the third quarter in 2018. The result is, of course, heavily impacted by the fact that we are running Alunorte at 50%, Albras at 50%, and also Paragominas at 50%. Results in, of course, lower volumes, but also cost inefficiencies. Beside the Alunorte effect, there are also significant higher raw material costs in total NOK 2.6 billion in the quarter. NOK 1.6 in Primary Metal, which is, of course, alumina cost, but also higher cost for black materials, petroleum coke, coal tar pitch for anode production. Bauxite & Alumina, it was about NOK 1 billion higher cost due to caustic soda and energy.
Downstream delivered NOK 300 million below the same quarter last year due to lower volumes and lower margins. Energy delivered NOK 50 million better result than the same quarter in 2017 due to higher prices, good production. With regard to the Better program, we were close to deliver on the Better program last year if it was not for Alunorte. With Alunorte situation, half machine and also the, all the effects that has, we are not able to deliver the 2019 target for the Better program, as we also did not deliver on the 2018 target due to the situation in Brazil. The Board of Directors has proposed a dividend of NOK 1.25 per share. That is going to be decided by the annual general meeting in May.
That reflects the challenging year we had in 2018, also the volatility in our industry, but also the fact that we have a strong financial situation. With regard to the market, we had a deficit in 2018, and we also are going to see a deficit in the global market in 2019. I will come back to that. With regard to the demand, there are some uncertainties in the market due to trade and also the macroeconomic development. We expect that the demand for Primary Metal will increase with 2%-3% in 2019. Let us move on to Brazil and take a look at the status. As you know, we have signed agreements with the authorities in September, which is related to a technical agreement and a social agreement.
We are now delivering according to that agreement continuously. That is also a good fundament for the dialogue we have with the authorities. We have a constructive dialogue with authorities in Brazil. With regard to the embargoes, IBAMA, the federal environmental agency, lifted the embargo on the press filter early October last year. Later this month, later October, they also lifted the embargo on DRS2, which is the new bauxite residue area. SEMAS, the state environmental agency, issued a technical note confirming the validity of the existing license for DRS2. In the middle of January, they also issued a technical note attesting that Alunorte can be operated at full speed safely.
That is very important input, now to the judge, but of course, now it is up to the judge to make the decision, and the judge is then going to make a decision on the DRS2 and also the embargo on production. We have provided the judge and authorities in general with the documentation, but they also received independent documentation. Professors at University Campina Grande has made a report to the authorities saying that we can safely operate Alunorte. Of course, they then focus on also very much on the water treatment system that I will come back to. It is a matter of time. We expect that we will be back in full production, but we don't know exactly when that can happen.
When the judge has made a decision, then we also expect that SEMAS will give us the necessary authorities to take Alunorte back to full production. This is the new water reservoir system we have built and is now ready in Alunorte that has increased the capacity of water handling with 350%. That means we are very well-prepared for extreme weather also due to climate changes that may come later. We have obviously now a very different situation with this this over capacity that is now established. In parallel, we are also now building a water treatment plant, which will increase the capacity for water treatment with 50%, and that is going to be ready in the second quarter this year.
We have talked about the press filters, which is the state-of-the-art technology for handling bauxite residues. We decided already in 2014 to invest in the most advanced technology for handling bauxite residues, and we established the technology and were ready to start up. In the middle of the or in the early part of the commissioning phase, we experienced the embargo. The plan was to ramp up the press filters in parallel with ramping down the drum filters. Due to the embargo, we lost eight months of learning curve, fine-tuning and adjustments. When we look at the current capacity of the existing eight filters, we will have a capacity of 75%-85% of the total capacity that is needed for Alunorte.
We will still do improvements of these filters, but we still need the ninth filter that will be ready in the second or third quarter this year. Move over to the market situation, in the fourth quarter, we experienced a growth of 2.4% compared to the same quarter the year before. 2.8% growth in China and 1.8% growth outside China. In the same period, we saw a production growth of 2%. If you take a look at the supply-demand balance, on the quarter, we saw a small surplus in China and a deficit of about 0.5 million tons in the fourth quarter outside China.
You take a 12 months rolling situation and look at the supply-demand balance, we saw a 2 million tons deficit in the end of 2018. We expect 2%-3% growth in China, with 2 million tons deficit in the end of 2018, that means that the global inventories has also been reduced with 2 million tons in 2018 from the end of 2017. In the quarter, we saw about 300,000 tons lower inventory. If you then also take a look at inventory days, they are now trending downwards towards the level we had before the financial crisis. We had then a level of around 50 days. We are now approaching, and, like, passing 60 days inventories.
That means that inventories are going down, inventory days are approaching the pre-crisis level, and we are now probably going to see a more tight market going forward. If you then take a look at the situation for 2019, that is expected with regard to supply-demand. We see today that or expect that the growth in China will be around 2%-4%. When we take a look at the situation for the moment, we see it's closer to 2% than 4% in China. We expect 1%-3% growth in demand of primary metal outside China. On the supply side, we expect a 2%-4% growth of production in China. In 2018, it was 0 growth in China. Outside China, we expect 3%-4%.
There will be some more capacity in Middle East. The Albras smelter has been expanded, and we expect also some restarts in the US. We expect 3%-4% production growth outside China. When we add this together, there will be a small surplus in China, a significant deficit outside China, and all in all, we expect that in 2019, there will be between 1 and 1.5 million tons deficit in Primary Metal. That means inventories will further decrease. If you then take a look at the metal price development, from a very volatile situation early in 2018, we see now a softening prices.
A market price went down from $2,068 in the third quarter to $1,978 in the fourth quarter, and the realized price was $2,041 per ton. When we look at the standard ingot premiums, steep increase in the U.S. due to the import duty of 10% that was compensated by the ingot premiums. I've seen some softening in premiums lately, and we see now from a level of close to 500, 480. It's now trading around $434 per ton. In Europe, we see a standard ingot premium of $127, and in Japan, $84 per ton. We move on to alumina. Also here, volatile situation in 2018. Prices are coming down.
See market price going from $542 per ton to $450 per ton as a PAX average in the quarters from the third to the fourth quarter. We had realized alumina price of $463 per ton in the fourth quarter. Quite similar, it was $460 in the third quarter and $398 per ton in the fourth quarter of 2017. It was the arbitrage earlier in 2018 that where it was made some contacts for export, and China exported 800,000 tons alumina in the fourth quarter. That arbitrage window is now closed. For Hydro, we have secured the alumina supplies to our smelters through the first quarter and also into the second quarter this year.
If you move downstream and look at the expected demand in 2019, we expect in extrusion that there will be o n Europe and U.S., a demand of, you know, growth of about 2%. In the Rolled Products, we expect that in U.S. and Europe there will be a growth of around or close to 3%. While it was very high growth in the building and construction in U.S., 6%-7% last year, we see now closer to 2%. Also transport automotive was 9%-10% in 2018. We see now also there, a more normal growth figures. It was very high growth in especially the heavy truck and trailer market in U.S. last year.
We expect it will still be a good development in automotive, but in average, in Europe and U.S., around 2%. In Rolled Products, we see, or still, a good growth in transport automotive. This is due to body in white substitution with steel. Packaging is a very important market segment, and we see also good growth there. It's mainly can that is now contributing. All in all, close to 3% growth in Rolled Products expected in 2019 in these markets. You then move on to raw material cost development, where we had quite some changes during the last years. We have now seen a softening in caustic soda, input material for alumina production.
Also now some lower levels on fuel oil and steam coal. Still, there are time lags here of almost one quarter, so this quarter was also impacted by higher prices. On black material, petrol coke, and coal tar pitch for anode production, also here we see some lower levels in the quarter, but also here time lag has led to higher cost in the quarter. Now we see the developments going in a positive direction seen from our side. Also, for primary metal, it has been very high prices on alumina, and that is also now coming down. This are prices that is common for the whole global aluminum industry, so it's not only Hydro, this is something that will...
It's a development for the whole industry. You then move over to the EBITDA cost and EBITDA margins, we see in alumina production that cost has gone up, very much impacted by the Alunorte situation, but also due to higher raw material and some fixed costs. It was especially the higher sourcing cost and sourcing volumes that has been impacting the results. Although the price level is similar as the previous quarter, the margins has been reduced. You then look into the primary cost and margin, also here, lower margins due to higher cost of input materials.
Here we should remember that in the third quarter, Albras had power sales, quite profitable power sales that contributed to $100 a ton on this scale, and that was not recurred in the fourth quarter. Rolled Products sale was quite stable, 1% higher sales in 2018 compared to 2017. A strong contributor here is body in white, of course, and due to also the fact that Automotive line 3 now is working quite well. Quite good improvements and the sales of body in white in 2018 was 30% higher than in 2017.
Versus the fourth quarter 2017, we had 2% lower sales, and that was due to operational issues in Alunorf, the big hot and cold rolling mill in Germany, which also reduced the can volumes, we also had lower volumes on foil and litho. When we compare the fourth quarter results with the third quarter result, it's very much the standard seasonal variation. Extruded Solutions delivered a very good result in 2018, better than 2017. The strategy, value above volume, continues with better net added value in the different business units. It's one exception here, that is precision tubing, and that is due to the acquisition in Brazil that contributes negatively. You probably remember that we acquired two of the Arconic extrusion plants in Brazil last year. On power, Energy delivered good result.
The power price was NOK 24 lower than the previous quarter, NOK 165 per MWh higher than in the fourth quarter 2017. The hydrological balance was very much negative through the year, it improved in October due to heavy rain. We moved into drier and colder climate, and then we ended up with a negative hydrological balance of -15 terawatt hour compared to normal. The quarter started with -7. On the Better program, as I said, we continue with our improvements along the value chain. There are very strong effort and good contribution from improvements. This is a part of Hydro's DNA.
We have had significant improvements through the last 10 years. Due to the situation in Brazil, we are not able to compensate for that. With the contribution that there was NOK 1.4 billion in 2016, NOK 0.4 billion in the year after, we had a significant negative contribution in 2018 due to the situation in Brazil. There are also some indirect effects there that we had to source lower quality alumina into some of our smelters, which led to lower operational performance results. Rolled Products continue with the improvements. It's good to see now that Automotive line 3 is now contributing positively. Also, there are significant efforts also done to improve the used beverage can line in Germany. Over to the dividend.
As I mentioned, the Board of Directors has decided to recommend NOK 1.25 per share as a dividend for 2018. As I said, this reflects the challenging year of 2018, but also the volatility industry and also that we have a strong financial situation. The payout ratio is 58% for the year. If you take the last five year, it is 57% payout ratio. The policy is 40% over the cycle and NOK 1.25 as a minimum. The decision will be done by the general meeting in May, as I mentioned. The payout represent NOK 2.6 billion. That will also be paid in May.
Key achievements in 2018 is that we are realizing the synergies of the integration of Extruded Solutions. We are now at full production of the Karmøy Technology Pilot, the production parameter shows that the technology is working well. We are producing aluminum with the world lowest energy consumption at Karmøy smelter. We have made a build decision at Husnes, that project is now ongoing, and we will be ready to restart Husnes in about one year's time. We have a power contract with Statkraft that expires in 2020, we are now secured power at competitive terms after 2020 for our smelter portfolio here in Norway.
As I said, we have posted development now on Automotive line 3, and there is a very strong demand for body in white for these products. We have also pursued, growth opportunities in Extruded Solutions and, in recycling. With that, I give the word to CFO Eivind Kallevik. Please.
Thank you, Svein Richard . Good morning, everyone, and welcome from me as well. I will take you through the financial results for the quarter. In the fourth quarter, we delivered an underlying result before financial items and tax of roughly NOK half a billion, which is significantly lower compared to both the same quarter last year of NOK 3.6 billion and the previous quarter of NOK 2.7 billion. The results are clearly affected by the curtailments in Brazil, reducing both bauxite, alumina, as well as aluminum production with a total effect of roughly NOK 1.1 billion negative. The major driver in the negative direction is clearly the increase in raw material costs over the year. This has a total negative effect of NOK 2.6 billion.
Of this, roughly NOK 1.6 comes in Primary Metal, NOK 1.2 being alumina, and roughly NOK 400 million on black materials. The other half of this is coming from energy, bauxite, as well as caustic soda. Fixed costs are up some NOK 300 million. This is mainly due to normal inflationary pressures, but also to a certain extent, an increase due to the Karmøy Technology Pilot having ramped up. The negative effects were somewhat offset by the higher realized alumina prices, as well as the currency effects from the weaker BRL, having a positive impact on the translated fixed cost in Brazil, and altogether NOK 0.6 billion in total. Other here includes a combination of positive and negative effects, netting out to positive NOK 400 million.
The main effects here come from the strong performance in Energy, the metal market remelters, but also the higher margins that we realized in Extruded Solutions. If you look at the full year development, we see some of the similar drivers as we saw in the fourth quarter. The underlying EBIT decreased with roughly NOK 2 billion from NOK 11.2 billion in 2017 to NOK 9.1 billion in 2018. The total volume effect from the production embargo and subsequent curtailments in Brazil is about NOK 2.3 billion negative. The increase in raw material costs reduced the results significantly with some NOK 9.4 billion, again, with almost half of this coming through in higher alumina costs. On top of this, we had NOK 1.2 billion in higher fixed costs.
On the positive side, we've seen a significant NOK 7.7 billion positive effect from higher realized oil in aluminum prices, alumina prices, as well as currency support. The full consolidation of Extruded Solutions have given us a positive accounting effect of around NOK 1.2 billion. All the downstream divisions have improved their margins and volumes, adding roughly NOK 0.9 billion to the results. This is primarily driven by the significant improvement we've seen in net added value and Extruded Solutions, but also better margins in Rolled Products as well as in the Metal Market remelters. Finally, a number of positive and negative effects netted out to a positive NOK 0.9 billion. The biggest positive effect here is the change in internal eliminations, as well as the stronger results from our Energy division.
If we take a quick look at the key financials for the quarter, the revenues are relatively flat between the quarters, as lower volumes in all the business areas have been partly offset by higher prices. This quarter, we excluded from the reported EBIT of NOK 335 million, a loss of NOK 199 million, which I will get back to on my next slide. The financial expenses of NOK 0.7 billion includes a net foreign exchange loss, which is mainly unrealized, of NOK 0.4 billion. This reflects a weaker NOK and euro, versus euro and dollar, which gives us an unrealized effect on the embedded derivatives that we have in the Norwegian power contracts. This has been partly offset by gains on intercompany assets, which has been denominated in dollars.
The income before tax was -NOK 0.4 billion compared to the positive NOK 3.7 billion in the fourth quarter. The income taxes of NOK 270 million in the fourth quarter reflects the relatively high share of reported income before tax subject to power surtax. As we will see from the results, the Energy contribution is a significant part of the earnings for the company this quarter. If you look at this on a yearly basis, the income tax expense is 32%, very much in line with our guidance of 30%. A net income of -NOK 0.6 billion down from a positive NOK 3.6 billion last quarter.
The underlying net income, NOK -0.2, significantly down from the NOK 2.8 billion in the last quarter, in the same quarter last year. Consequently, the underlying EPS is also significantly weaker, and this quarter was - NOK 0.06 per share. Let me quickly comment the items excluded. In Q4, we excluded usual timing effects, which this quarter netted out to a - NOK 33 million. In addition to those, we also had several one-off items. We had NOK 79 million related to rationalization and closure costs, and this is split between the foil restructuring that we are doing in Rolled Products, as well as a partial closure of an extrusion plant and Extruded Solutions.
In addition, we also have excluded loss of NOK 86 million related to a pension scheme charge in the UK and also some other smaller effects. Turn to the individual business area and start with B&A. The underlying EBIT for B&A decreased significantly from NOK 1.9 billion in fourth quarter of 2017 to NOK 493 million in fourth quarter of 2018. The results are obviously negatively affected by the 50% production restrictions at Alunorte and subsequently Paragominas, and this has a volume effect of roughly NOK 0.8 billion for the quarter. In addition to the volume shortfall, lower production also means a higher fixed cost per ton, thereby affecting margins, despite the fact that the fixed costs are relatively stable in absolute terms.
Margins are also hurt by higher sourcing costs, as we had to source significantly more third-party alumina at increased PAX prices. This, of course, is to compensate for the production shortfall at Alunorte. In Q4 2018, we sourced approximately twice the amount compared to Q4 2017. On the positive side, $65 per ton higher realized price, driven by 60% strengthening of the PAX index, lifted the results with roughly NOK 300 million. In addition, on the currency side, a 17% weaker BRL versus the dollar, positively impact the fixed costs, lifting the results with another NOK 300 million.
If you look at this from a full year perspective, B&A results decreased from NOK 3.7 billion in 2017 to NOK 2.3 billion in 2018, and the drivers are much the same as I've commented on for the quarter in isolation. If you're looking into Q1, and as Svein Richard has explained, we have taken several measures in order to strengthen the robustness for our production system and the refinery, but we are still not able to give you any indication as to the start of a restart of Alunorte. On the cost side, raw material cost side for Q1, we do expect to see a slight decrease, both on the caustic side as well as on the fuel oil side.
Let me just remind you that the alumina prices are typically realized with a one-month lag, indicating that you should see a reduction in the realized prices in Q1 compared to Q4 if prices stay where they are today. Last on this slide, we do expect to source a bit less alumina in Q4, as the volumes of externally sourced volumes in Q4 was very high and part driven by additional sourcing in the period where we anticipated that Alunorte had to close down 100%. If we turn to Primary Metal, the online EBIT decreased significantly with more than NOK 2 billion, from NOK 1.4 billion in the fourth quarter to NOK 677 million in the fourth quarter of 2018.
By far, the main reason here, is the significant increase that we've seen in raw material costs, explaining roughly NOK 1.6 billion of this reduction. NOK 1.2 billion is related to alumina costs, with roughly NOK 400 billion coming from higher carbon costs. Lower production and sales due to the Albras curtailment, despite being somewhat offset by the ramp up of the current technology pilots, also had a negative effect of around NOK 200 million. Other effects were relatively minor during the quarters, as prices and currency remained relatively flat. For the full year of 2018 versus 2017, the results decreased with more than NOK 3 billion, from NOK 5.1 billion in 2017 to roughly NOK 1.8 billion in 2018. The main reason, again, is the higher raw material cost, which contributed negatively with approximately NOK 6.5 billion.
This, together with lower sales volumes, higher fixed costs, and negative currency effects, further reduced the results. This was again partly offset by higher realized premium, higher realized aluminium prices, contributing with $4.5 billion positive in the year. If you look into Q1, we still expect to see Albras producing at 50%, until we have a clearer situation on the Alunorte embargo. On the price side, we have at the end of Q4, sold around 60% of our aluminium production forward at the price level of around $1,975 per ton.
We've also booked 55% of our premiums at Q1 at around $430 per ton. We expect the realized average premium for Q1 to be in the range of $325-$375 per ton, slightly below what we realized in Q4. If we look at the raw material side, we do expect to start realizing the down one trend that we've seen, both when it comes to alumina as well as carbon costs in the first quarter. In Metal Markets this quarter, we did deliver a very strong online EBIT of NOK 275 million compared to NOK 185 million in the fourth quarter of 2017.
Let me emphasize that the reason behind this strong result development is very good performance in the remelters and Metal Markets, where they have increased their margins. If you exclude the NOK 58 million in positive currency effects, the result was NOK 217 million, up from NOK 157 million in Q4 last year, and double compared to the guidance of NOK 100 million per quarter. For the full year, results excluding currency and inventory valuation effects improved from NOK 499 million to NOK 658 million for 2018. Again, mainly reflecting the improved margins we see at our remelters. Talking about guidance, we have for a long period of time guided for NOK 400 million on an annual basis for Metal Markets.
Given the strong performance that we have seen during 2018 and the outlook we have for the remelters in this business, we are now lifting the guidance to NOK 500 million starting in the year of 2019. That being said, please remember that the outlook and results in Metal Markets are always volatile, driven by the currency and mark-to-market effects on metal. Let me on this slide also mention the accident we had at the Henderson remelter in Kentucky in the U.S. We did have an explosion in the furnace in Q1. No personnel was injured, but the melting or the furnace was damaged and it will take about one to two months for that plant to come back into production.
The plant produces about 90,000 tons on an annual basis of extrusion ingots. We do estimate that the financial impact will be around $5 million for the quarter. We turn to Rolled Products and downstream. Rolled Products did deliver a disappointing and weak, negative result in Q4 of $130 million compared to the $95 million in the fourth quarter of 2017. On the positive side, the performance on the Automotive line 3 is improving, and supporting the results. This along with more customer qualifications and strong demand, has led to significantly higher volumes to the automotive customers. Overall, however, the volumes are down 2% compared to last year. This is partly affected by the weaker markets, in some segments, and partly due to the operational issues and capacity constraints we've seen at Alunorf.
We also seen average margins coming somewhat down in particular within the litho and general engineering segments. We've also seen significant cost increases due to inflationary pressures on personnel costs in Germany, higher maintenance activity, including UBC, as well as higher energy costs due to the increased power prices in Germany. On the Neuss smelter side, the negative effects of significantly higher alumina and raw material costs combined with lower aluminium prices, have to a large extent been offset by the more competitive power contract that we have in place starting in 2018. For the full year of 2018, the Rolled Products results improved marginally to NOK 430 million compared to NOK 380 million we saw in 2017. No, this is despite the benefit of the new power contract that we have in Neuss.
This partly reflects a very challenging operational performance in 2017, with positive developments in 2018, where we've seen the Hamburg plant, the Automotive line 3, as well as the UBC, recycling facility showing better performance. This has been offset by higher energy, higher personnel, and higher raw material costs within our operations. If we look into Q1, we do expect an overall healthy demand for Rolled Products. However, it is worth mentioning that in addition to the continued margin pressure in this business, we also see somewhat softer demand within some of our key segments, like foil and general engineering. When it comes to the Neuss, aluminum plant, do remember that these results are, as normal, driven by metal prices and raw material price developments.
As in Primary Metal, we do expect raw material costs to come down somewhat into Q1. We do continue to work on resolving a number of the operational issues in Rolled Products. While not fully resolved, performance in Alunorf is improving, and we see performance in December and January, certainly better than Q3 and better than bigger parts of Q4. Also worth mentioning that the Automotive line 3 is continuing to pick up speed and volume deliveries. In Extruded Solutions, the underlying EBIT declined from NOK 284 million to NOK 202 million in the fourth quarter of 2018. On the positive side, as also explained by Svein Richard, the net added value per kilo continues to improve year-over-year. However, the net added value in this quarter has been largely offset by an increase in fixed and production-related costs.
Though the increase in production-related costs is primarily driven by ramp-up of new product lines in Europe and a related combination of several smaller operational issues, similar to what we communicated also in Q3. The results in the North American operations are very strong and have improved significantly, despite the impacts they've had on the Section 232 tariffs and somewhat declining Midwest premiums in this quarter. This quarter was also, as the previous ones, have been negatively affected by the results in the acquired precision tubing plants in Brazil. For the full year of 2018, Extruded Solutions results was NOK 2,390 million, only slightly higher than the pro forma results of NOK 2.3 billion in 2017.
If you adjust for the negative impact of the acquired plants, the result for the quarter or for the year would be around NOK 2.5 billion, an improvement of 7% from an EBIT perspective compared to the year of 2017. The other main drivers are for 2018 versus 2017 is the same as in the quarter. If we look into Q1, we are working to stabilize the new product lines in Europe and are putting mitigating actions in place to reduce the costs and also to reduce the trade effects in the US. On the market side, we continue to see good positive growth, albeit probably at a slightly lower pace compared to what we saw in 2018.
The underlying EBIT for Energy increased with 9% in Q4 2018 versus Q4 2017, from NOK 457 million to NOK 500 million, making it the strongest quarter we've had in Energy since 2008. The main driver for the increased result was significantly higher spot prices, having a positive contribution of around NOK 200 million. The production for the quarter was strong at 2.8 TWh, however, somewhat lower than a very strong quarter in 2017 of 3.1 TWh, impacting the result then negatively. In addition, remember that we do have a repricing of the internal contract to Rolled Products, having a negative impact of roughly NOK 60 million compared to the same quarter in 2017. For the full year of 2018, the Energy result of NOK 1.8 billion, that's roughly NOK 300 million better compared to 2017. Again, it's primarily driven by higher market prices.
If you look into the next quarter, let me remind you, as I always do, price and volume developments in Energy is highly uncertain, as it depends on precipitation, weather forecasts, and price patterns. So far in 2019, the NO2 price, where we produce and sell most of our power, has increased quite a bit compared to Q4 and is now averaging around NOK 540 per MWh. Also, starting mid-February, we will have a scheduled maintenance at Suldal I, which will affect the production levels at RSK. Also remember that we had similar maintenance periods in our systems in Q1 of 2017. Other eliminations netted to a negative NOK 145 in Q4, compared to a negative NOK 715 million in last year.
The other line mainly consists of corporate costs in addition to some other elements like industrial insurance, industrial parks, as well as integration costs for the Sapa acquisition. This quarter was negative with NOK 299 million, which is somewhat above the guidance that we've given of NOK 175-NOK 200 per quarter, but it's fairly flat compared to the same quarter last year. Finally, eliminations amounted to NOK 154 million positive in Q4. This mainly reflects the reduced internal margins in Primary Metal, as well as reduced internal alumina purchases. If you look into 2019, we do expect the corporate costs to be around the same level as for 2018, NOK 175-NOK 200 per quarter. On top of this, we expect an additional NOK 100-NOK 150 in software integration costs. Quickly on net debt developments.
The net debt position increased with more than NOK 2 billion from NOK 6.5 billion at the beginning of the quarter to NOK 8.7 billion at the end of the quarter. We did generate an underlying EBIT of NOK 2.2 billion. As guided and seasonally normal, we did release working capital in Q4, in this quarter to the tune of NOK 600 million. Taxes and other adjustments of -NOK 1.2 billion is a combination of tax payments of roughly NOK 1.5 billion, and dividends received from Qatalum of around NOK 300 million. As a result of this, we generated net cash flow from operations of positive NOK 1.6 billion in the quarter. Investments came in at around NOK 3.4 billion this quarter, which is largely in line with the guidance that we've given. Finally turning to the adjusted net debt.
This is up in Q4 for two main reasons. One, is the NOK 2.2 billion in net debt, which I just explained. Secondly is the significant NOK 2.4 billion increase in net pension liability. This is mainly due to reduced discount rates in Norway, as well as reduced return on assets in the pension scheme. The other lines remain relatively stable compared to the end of Q3. Fairly stable debt in Qatalum, the total net adjusted debt, including equity accounting investments, amounts to NOK 28.7 billion, almost NOK 5 billion higher compared to the beginning of this period. Let me finally end at the end. Again, just to remind you that as of January 1, 2019, the new IFRS 16 standard will require that all leases are recognized on the balance sheet.
This is estimated to increase our net debt with approximately NOK 3 billion. This effect will be partly compensated in adjusted net debt as operational leases will be reduced for an assumed tax benefit. Adjusted net debt is estimated to go up with approximately NOK 1.5 billion. Thank you.
Thank you very much, Eivind. I would like to sum up with the priorities of 2019. Of course, safety will remain top priority for Hydro in all our operations in the world. We are operating in more than 40 countries and have now more than 35,000 employees. I would like to bring your attention to the tragic dam disaster in Brumadinho, a tragedy that left more than 300 people dead or missing as a result of the dam break in Brazil. Our thoughts are going to their families, friends, and colleagues. We also have tailings in our 100% owned bauxite mine in Paragominas. We also have tailings in the MRN mine, where we own 5%. We should remember that these tailings are different material.
They are built up with a different construction, different technology, and most of all, they are much drier material. We are, of course, also having a comprehensive, continuous monitoring of these tailings. The first priority for us in Brazil is, of course, also to get Alunorte and our assets, our operations in Brazil back to full speed. We have a constructive dialogue with authorities. In spite of, we are very eager and ready to start, I cannot give a date when this can happen. We are working in that direction every day. We will continue with the value-creating integration of Extruded Solutions that continues with good results. We will continue, of course, our focus on project execution and operational excellence.
Continuous improvements will, of course, be also very much in focus. Continuous innovation and continue to be a company with even more sustainable operations along the value chain. We will make sure also that we maintain our financial strength and flexibility. Thank you very much for your attention.
We will continue with the questions and answers here. We have a microphone, so please wait for that and signal if you want to ask a question. Please state your name and affiliation.
Hans-Erik Jacobsen from Nordea. Last year, I think Chinese export increased by approximately 20%, a lot of that semi-fabricated products. Can you say anything about how this impacts your downstream activities, about sales volumes and margins?
We are seeing competition from China. It's more indirect, the fact that China is mainly exporting to the neighboring countries. We also see Chinese material coming to Europe. That keeps the pressure on margins. There are some products where it is difficult for Chinese to export. Body in white material, for example, there is a limitation also due to the large variety of different qualities, alloys.
Extrusion also is an area where it's very difficult for China to compete in our home markets because there are thousands of different profiles, alloys, lengths, and different constructions. Extrusion is an area where we don't see the same magnitude of competition from China as we see in Rolled Products.
Thank you.
Morten Normann, Carnegie. Primary Metal was the biggest blow this quarter. Can you please take us through the EBIT or EBITDA bridge from Q3 to Q4?
Sure. I think that there's a couple of major components. One of them, of course, is Energy sales in Brazil. As we talked about in Q3, we do sell all the excess power we have when Albras is curtailed to 50%, and that's roughly 0.8 TWh per quarter. That gave us a revenue side which we guided on roughly to around NOK 400 million-NOK 450 million. Prices, as we also talked about, are very low, due to the weather pattern, and this is one of the river production in Q1 or in Q4. A variation of roughly of NOK 500 million, if you like. Then there is also increased cost on raw material and certain fixed costs. Well, not so much fixed cost, but raw material cost increases in the period.
Could you please be a little bit more precise on the cost side?
Yeah. Alumina costs are up quite a bit, and carbon costs are also up somewhat. I don't have the number in my head. The biggest difference between Q3 is the Energy side.
Other questions from the room? We have some questions from... Stian?
Question from Jason Fairclough in Bank of America Merrill Lynch. Could you discuss the earnings miss compared to and the consensus on Rolled Products? To what extent is this a timing issue that could reverse or normalize in future quarters?
I can comment on the operational side. In the second half of 2018, Rolled Products experienced operational issues in Alunorf. This is the biggest hot mill in the world, and when you have small operational issues there, it has a big impact on total volumes. We had lower volumes due to and especially on can from Rolled Products. This is now back on track, so Alunorf is now delivering what they should. In the second half and the fourth quarter there, that the results was impacted. Eivind, maybe you can go into some numbers maybe.
Yeah. I think when you, when you look at the results, a big part of the decrease or weakening results, in Q4 is also related to inflationary pressures and cost for personnel, and that has a tendency to stick until we, actions are taken on that. The second part of it is that we see, some weakening in certain segments that we operate in, both, when it comes to foil, and a certain extent also general engineering. That is also, a weak part when we look into Q1 volumes.
Also on, Alunorte, is it possible to give any more color on the timing of a court date? What steps are needed to resume full production and so on?
With regard to Alunorte, it's very difficult to give a time and timing, Jason, it is of course something we are working with day and night. Documentation is provided. It's also good to see that the environmental authorities are now supporting full operation. It's up to the judge, the judge will take the time that is needed and also make sure that the documentation is what is needed. It is not possible to give any timeline for that. Of course, we are also, of course, very eager to come back in full production, and we are preparing for full production in Alunorte as soon as possible.
It still will take a couple of months before we are able to ramp up. As I mentioned, there are also some issues related to the press filter, that means we will need a ninth filter that will be ready in the second, third quarter this year.
A question from Menno Sanderse in Morgan Stanley. Was there a no-noticeable impact of destocking or related price effects in Rolling and Extrusion in Q4? If so, will that continue? Question two on that, what actions are Norsk Hydro taking, doing to adjust to the softening demand environment in rolling and extrusion?
There's a certain extent of destocking within the rolling segment. We see this in foil where our customers have been probably sitting with too much inventory also compared to normal as they got towards the end of Q4 and then took down their buying patterns, which is also a reflection of what we see in Q1. Think when it comes to Extrusion in general, we still see overall good growth. It's not the same growth level as we saw in 2019, remember that, for instance, in the U.S., the growth levels was exceptionally strong. A somewhat weaker result or somewhat weaker growth is still very good growth rates.
Question from Liam Fitzpatrick in Deutsche. Could you provide some more guidance on Q1 2019 costs for Primary Metal and alumina? When will the business see the benefit of lower costs?
When it comes to black material and alumina, black material is gonna come down, we believe, around 5%, which should translate into roughly NOK 50 million-NOK 100 million improvement. When we look at the alumina prices that we expect to realize, in the range of NOK 350 million-NOK 400 million in Q1.
Question from Daniel Major in UBS. Rolled Products continue to struggle. Are you considering more radical changes in the portfolio to improve profitability?
Well, we have introduced restructuring in the foil business of Rolled Products. Of course, we are looking into also other measures to improve the performance. It has been an issue related to some operational problems also last year that we are now solving. With regard to the situation at Alunorf, Automotive line 3, we see now a much better performance. Also better performance in automotive in the UBC, they used beverage can recycling line. That is still an issue that has to be worked more on in during this year. We are not back on the full production of UBC, but there are several other elements that we see moving in a positive direction.
Of course, there is a pressure on the margins, as Eivind mentioned, and that is also the reason why we now see it is necessary to do some restructuring internally, and that is something we are working with.
Finally, on Extruded, when will the negative impact of the Brazilian acquisition normalize or improve?
Yeah. Again, this is an acquisition where we acquired seven presses, one cast house, and a tool shop for $10 million last year. We expected that it will be a tough start because the market has been negative. You also see now that the Brazilian market is moving in a positive direction. I'm not sure we can give any date when this is turning on the positive.
Other than we can anticipate that the delta changes, is turning in a positive territory in 2019.
Yes.
Okay. Thank you, Stian, and thank you, Eivind. That concludes this presentation and webcast. Thank you all for coming.