Welcome to Hydro and our presentation of Q4 results. They will, as usual, be presented by our CEO, Svein Richard Brandtzæg, and CFO, Eivind Kallevik. Before we start, have a look at this.
If someone is wondering what Norway should live from after oil and gas, this is it. With my background, with education from the Norwegian University of Science and Technology, I could spend the rest of the day talking about the pilot, but let's now move over to the Q4 results. We delivered now NOK 2.9 billion on EBIT on the Q4 in 2014, which is NOK 1.4 billion better than Q3, and about NOK 2.4 billion better than the Q4 in 2013. The main driver behind the improvement in results is higher all-in metal prices with strong premiums. Also, in Norwegian krone, we had 13% improvement in price for the metal products, compared to the Q3.
The higher LME also resulted in improved results from or supported the results from alumina, as 75% of all our alumina contracts is linked directly to LME. This year it will be reduced to 70%. The rest is sold according to the Platts alumina index, which also has improved, which is also then supporting the results. I'm very happy to see that the performance in Brazil continues for the second consecutive quarter to improve also with regard to volumes. Stabilized volumes at 6 million tons in Alunorte, and record high volumes in Paragominas, now running at a rate of 10.2 million tons, meaning above nameplate capacity. Also the cost is now going down in Brazil, which is of course the intention behind the B2A program.
The technology pilot was decided, and I will come back to that later. But also, the board of directors is now proposing a dividend of NOK 1 that will be decided in the annual general meeting in May. The board of directors has also revised the dividend policy from 30%-40% dividend of net income over the cycle. Let us now take a look at macroeconomic development and the impact on the primary demand. Even if we have seen several important indicators moving in the right direction, like industrial production and PMI index, we see a disappointment in Germany with weaker production than expected.
The quantitative easing that is starting in March with EUR 60 billion every month may kick-start some activity, but we also see that the energy prices are going down and the euro currency is also weaker. There could be some improvements in Europe. We saw the demand in aluminum increased by 2.3% in 2014. We expect a positive development this year, positive growth, but at a lower level than last year. In U.S., there is full throttle ahead, strong demand in most market segments. Transport automotive, the strong driver, but we also see positive development in building and construction. Demand in the U.S. was about 5.3% last year. We expect that the primary demand in U.S. will be similar in 2015.
In China, strong development in the demand, 12.6% increase in demand in China in 2014. Of course, there are some weakening signs in building and construction. The real estate market is sluggish, but government is also supporting infrastructure projects. The picture in China is quite diverse between different segments. On emerging markets, we see that the Russia-Ukraine crisis is impacting the demand in Eastern Europe. In Southeast Asia, however, we see strong demand. Also in India, strong development that we also expect this will continue in 2015. There are major currency movements during the last quarters.
When we look at the currency developments in countries where we have our operations, our position has strengthened due to the fact that the dollar has strengthened compared to the currencies in the country where we have our operations. Norway was definitely the place where the currency changes has been most predominant, which is again strengthening the competitiveness of the Norwegian smelters. That is, if you look at the countries in this slide, of course, a lot of capacity outside China is located in these countries. The fact that Hydro has improved competitiveness, that means that also a lot of other companies that have improved competitiveness due to the strong US dollar.
With regard to oil price and the impact or question, what does the oil price have with regard to impact on the cost curve? We believe that is minor due to the fact that there are a few smelters, if any, that has power supply from fuel oil-fired power plants. There are some aluminum smelters that have power from gas power plants that have gas prices linked to the oil price. We also see that some of the gas suppliers is increasing the gas price now, so this can have a twofold effect. Where we see the most interesting effect with regard to reduction in oil price is on the transport and the freight cost.
If you then take a look at the supply-demand balance outside China and we have previously talked about the deficit of about 1 million tons outside China. We see that deficit continues due to the development in the market. Seasonal variation resulted in about 4% lower demand in the Q4 compared to the Q3 of Primary Metal. The production during the year increased with 3%, and we also saw that the demand overall increased at about 3% in 2014. We talked about 2%-4% growth in the beginning of the year. Later, we talked about 3%-4%, and it ended up at 3%. We expect the demand in 2015 to also end up between 3% and 4%.
Again, the driver is really the automotive and transport with regard to the increased demand of aluminum, where we are substituting steel with aluminum. If you then look at the physical market and the premiums, we have seen increasing standard ingot premiums during the whole quarter in all important markets. In Japan, we saw increase also in U.S. and Europe. Recently we have seen Europe softening a bit, going down in premiums from $500 to $470 per ton. In U.S., further strengthening also during the first month of this year. U.S. premiums are now at $535, and we saw $5 improvement also in premiums in Japan, now at $425.
We are producing mainly value-added products like extrusion ingot, sheet ingots, primarily from the alloys, and we also have record high premiums of the metal products. There is a time lag. Eivind Kallevik will come back to that in his presentation, how that will work out during the quarter. We have booked already large tonnage in the Q1 at the higher premiums than what we had in the Q4. We see that in Europe and some markets in Asia, there are some softening on premiums. Not dramatic, but sideways development in U.S., however, in Turkey and Middle East, there are very strong premium development on metal products markets.
If you then take a look at the LME, it varied between $1,850 and $2,100 per ton. The realized LME was 1,997, coming up from 1,906 in the previous quarter. You should note that we have sold already 50% of the volume for the Q1 at $1,975 per ton. If you then take a look at the development, because you saw that the LME had a reduction in the quarter, in the end of the quarter and lately in Norwegian kroner, however, there's been a continuous strengthening of the metal price, and that is the all-in metal price now. That is at levels that we have not seen for quite a while.
If you then take a look at the inventories in the quarter, 4% down compared to Q3, that is the reported inventories outside China. We also saw a 10% decrease year-on-year of the inventories. If you look at the LME inventories in the Q4, we saw a reduction of 400,000 tons. This is again the result of the deficit.
There was a small uptick in the end of the year in the end of Q4 on inventory days, but that is the result of the seasonal lower demand in the Q4. If you then look at the alumina and bauxite, the bauxite price moved sideways in China, that is bauxite prices in China, CIF China, that we have shown here. We have also shown the value in use cost for China due to variations in quality, the cost or the value in use varies with quality. We see there are some volatility there. Now China is importing quite a lot of bauxite from Malaysia, where the quality has improved.
We also see that the quality there has deteriorated a bit, so that is due to the uptick in the end of the line there. If you look at the alumina price, we had $30 improvement, so we have now alumina price of around $350 per ton, which is again driven by import to China. If you move to China and take a look at export-import balance, we see a stable import of scrap on Primary Metal, it's now a net export or import. We see 38% increased alumina import during 2014 compared to the previous year.
Obviously China is now increasing the import of raw materials, but you also see the need for bauxite in China, where they have a deficit and need to import increasing volumes from abroad. After the bauxite export ban from Indonesia, they are now searching around the world for new sources. Malaysia, I mentioned already, is an important source. Due to the lowering freight cost, we have also sold more from Brazil to China after a period of time where we had a lower export to China. If you take a look at the export of semi-fabricated and semi-fabricated products from China into the neighboring countries, that has increased significantly in the Q4. Let us take a closer look at the reason for this.
Because we have talked about the metal advantage before in China, where there are export incentives, and also the fact that the high premiums that we have in the west, in the countries outside China, the producers in China are not benefiting from domestically. There is a metal advantage, and now we see more than $200 metal advantage for the Chinese downstream companies. We also see the increasing export of volumes from the downstream companies with semi-fabricated and fabricated products of aluminum.
If you then move into the operations and take a look at Bauxite & Alumina business, as I mentioned, the cost reduction continues and we saw $23 reduction in implied alumina cost from the Q3 to the Q4. This is of course due to the improvement program we have established, the B2A program, which is moving ahead or according to plan, and also very much improved energy efficiency. Currency helps us in Brazil. The weakening BRL is positive, seen from our side. Also the reintroduction of the Reintegra Tax Refund program is contributing positively. I mentioned 6 million tons in Alunorte and 10.2 million tons run rate in Paragominas, which is a record high production of bauxite.
Again, the B2A program is working well, we see that on the bottom line, and we also see that the margins are improving in Brazil. Another important issue in Brazil is the ICMS. You probably already know that we are paying ICMS tax on fuel oil after they changed the fuel oil ICMS tax last year. The aluminum industry has an exemption from ICMS in general. In July 2015, that ICMS will be revisited. That's why we have a close contact and good dialogue with the local authorities in the Pará province, where they will decide on that in July this year.
On Primary Metal, we also continue our improvements, but also here we were supported by a positive exchange rate development and increasing premiums. Now we ended the year with $550 per ton in EBITDA margin for the whole year. If you look at the quarter, we had $830 per ton, including Qatalum. If you look at Qatalum isolated, we had $1,200 per ton in EBITDA margin for Qatalum. Again, it shows the improved performance in general and specifically in our smelters, where we have invested a lot of money. The $180 program, which is the improvement program for the joint venture, is on track. We delivered $120 improvement until the end of last year.
We have $60 left until the end of 2016, and we are moving according to plan, as mentioned. The Karmøy technology pilot, as I mentioned, is a plant pilot where we are going to demonstrate the world's most climate and energy-efficient technology. Annual production here will be 75,000 tons, and we have now made the investment decision. The build decision will be taken later, and that is also very much dependent on sustainable power sourcing. We have some power contracts in place, but we need to get sustainable power sourcing in place before we make the final build decision on this plant. You all know that the ESA approved the 4th of February the support that we have received from Enova, NOK 1.5 billion.
The investment cost for the total project is NOK 3.9 billion. For Hydro, we are talking about investment of NOK 2.4 billion. We are now talking about energy consumption of aluminum production down to 12.3 kWh per kg aluminum. The world average is about 14.4. We will also have electrolysis cells in this pilot that will operate at energy levels between 11.6 and 11.8 kWh per kg aluminum, which is far, far better than any other technology in the world. If we now move to Rolled Products, significant seasonal effect, of course, the can business, people are drinking less in cold weather than in the summer, so that is a well-known effect.
On top of that, we also saw a lot of destocking in Rolled Products in the Q4. If you compare to the Q4 2013, which was a very strong quarter, we had 5% lower sales in the Q4 of 2014. Also here, lower some destocking effect, including Litho. In Litho, Automotive and Heat Exchanger segment, this was more than compensated by increased sales in Automotive. The sales for Automotive products increased with 25% in 2014. This was a big step forward in the right direction, and that is a market where we also now are going to invest with our new body-in-white line in Germany.
If you now take a look at Extruded Products, we had a strong development in the U.S. in 2014, 9% increase in demand. In Europe, it was moving more sideways, stable, and weak in building and construction. The seasonal effect, however, was 10% down in the quarter, in the Q4 compared to the Q3 in North America, and 6% seasonal effect in Europe, Q4 compared to the Q3 last year. If you then give an update on Sapa, the target of the synergies is NOK 1 billion. Until now, we have realized 50% of that to the bottom line. Also there, we see that the synergies is moving ahead or according to plan.
If you look at where we are doing restructuring, the majority of 20 plants, 17 is in Europe and 3 is in U.S. It's really the European market that is the market where we really need restructuring. This is, as I said, moving according to plan. Finally, looking into the hydropower situation and the reservoir level, we are now due to the improved precipitation ending up 11% above normal in the end of the quarter. This is in the southwestern Norway, where we have two-thirds of our production.
If you look at the price, it was very similar as the Q3, except for a situation in the middle of the quarter in October, where we had a price collapse due to very heavy precipitation, where the price went down to half of the average in the quarter, which is quite unusual at that time of the year. Finally, I'm also happy to inform you that there's been a decision on the dividend. NOK 1 per share is proposed from the board. That will be decided by the annual general meeting, as I said previously.
The new dividend policy from 30%-40% of net income over the cycle is also a clear demonstration of the commitment to return cash to shareholders and also the fact that we have a strong balance sheet and also a very positive earnings outlook going forward. The payout this year, if this is approved with 1 NOK per share, we are talking about the payout of NOK 2 billion. Earnings per share, 0.39, underlying 1.55 NOK per share. If you look at the average five years payout ratio is now 95%. With that, I give the word to Eivind, please.
Thank you, Svein Richard. Good morning, everyone. Since there are no accounting issues or any other special effects of significance this quarter, I'll go straight to the quarter. As Svein Richard has already mentioned, we have delivered an underlying EBIT of some NOK 2.9 billion this quarter. This is the highest quarterly result that Hydro has delivered since we became a pure-play aluminum company back in 2007. The underlying result before financial items and taxes then almost double the NOK 1.5 billion we delivered in the Q4, and is close to six times higher than what we delivered in the same quarter in 2013. If you look at the individual components for the development, we see that energy volume and price is up roughly NOK 0.1 billion between the quarters.
That is primarily driven by higher production as the alumina price and the area price differences were relatively flat between the quarters. Higher realized all-in aluminum prices, premiums, in addition to higher alumina prices, increased in this quarter, helped by the appreciation of the dollar. All in all these effects amounted to roughly NOK 1.3 billion in improved earnings. In addition, we saw a positive contribution on the cost side in Bauxite & Alumina, primarily driven by the lower cash cost at Alunorte. In total, this contributed roughly NOK 2.2 billion. Finally, a number of effects is also working in the other direction, a negative effect of NOK 0.2 billion. This is primarily driven by seasonally lower volumes in Rolled Products, Primary Metal, Sapa, in addition to increased depreciation due to the currency effects.
This negative effect is somewhat alleviated by less eliminations in the company and the improved results in Metal Markets. If you then take a look at the key financials for the last quarter of 2014 and for the full year of 2014. We saw an increase in revenues between the quarters of approximately NOK 2 billion. Again, the major driver is the high realized aluminum prices and premiums, alumina prices, in addition to the currency developments. This, in combination with higher volumes in B&A and Energy, more than offset the seasonally lower volumes in Primary Metal Markets and Rolled Products. We have excluded some NOK 591 million from the underlying EBIT, and we then get to a reported EBIT of a positive NOK 2,295 million for the quarter.
Financial items this quarter is NOK -2.3 billion, compared to NOK -1.1 billion in the previous quarter. This is largely driven by unrealized losses due to the strengthening of the dollar and the euro in the period. The US dollar has appreciated some 15% against the NOK and 9% against the BRL, which increases the US dollar-denominated debt when you translate that into Norwegian kroner at the end of the quarter. Also, the euro has appreciated some 11%, which has an impact on the embedded euro derivative in some of our power contracts. This gives us an income before tax of NOK -46 million, resulting in a tax expense of NOK 122 million.
The tax expense is then due to the power surtax that we have in Energy, which is calculated on the income before financial items. The underlying net income for the quarter is up NOK 936 million from Q3, reaching a positive NOK 1,979 million. If we summarize the changes from 2013 to 2014, we've seen a NOK 13 billion increase in revenues, driven to a large extent by the improved fundamentals in this industry, increase in LME, increase in premiums and alumina prices. Also very much helped by the improved performance in Bauxite & Alumina, as we have recovered from the operational disruptions that we have had in 2013. The underlying EBIT more than doubled to NOK 5.7 billion compared to the NOK 2.7 billion that we had in 2013.
Again, driven by the stronger market fundamentals, currency, as well as pricing for our products. The income before tax for the full year was NOK 2.1 billion, driven down by unrealized losses, giving us a calculated tax rate of 42%. When you look at this from an earnings per share perspective, we've gone from -0.45 or -45 øre in 2013 to a positive 45 for this quarter. From an underlying perspective, we've gone from 90 øre in 2013 to NOK 1.55 in 2014 due to the factors mentioned before. If we look to items excluded, as you know, and we mentioned in many quarters, we do exclude certain elements in order to guide you into the underlying performance of our business.
The unrealized effects on power and raw material contracts for this quarter primarily relates to a power contract, which includes certain embedded derivatives. This line relates to the Statkraft contract, and it pertains to the strengthening of the dollar in the period. Unrealized effects on the LME position this quarter netted to be zero. It is, though, a net of a loss or gain in the Primary side compared to a loss in the Rolled Products long position. We have a positive metal effect in Rolled Products of NOK 189 million. This is largely in line with the number we had in Q3, and this is driven by the increasing LME price measured in euro. We had NOK 146 million in impairment charges.
This relates to a plant we have in Italy, within the Rolled Products business area called SLIM, and it shows and reflects the weak performance we've had here for a while, and also the difficult market outlook we have for this plant. Finally, we have a loss of NOK 337 million pertaining to our ownership in Sapa. This is primarily related to the write-downs and impairments of fixed assets in two plants we have in China, in addition to some unrealized currency and LME effects. We turn to bauxite and alumina. I am very pleased to say that we are finally back in black after 11 consecutive quarters with losses and with a high end record results from the B&A area.
The underlying EBIT, NOK 528 million, a significant improvement of NOK 554 million compared to the result we had in the Q3. The largest contributor this quarter is lower operating costs, both at Paragominas and Alunorte. At Paragominas, it very much relates to lower maintenance and service costs, and at Alunorte it very much pertains to lower energy costs, improved energy mix in addition to lower caustic consumption and caustic prices. Results were also lifted by the positive price development for alumina, both when it comes to the 75% which is linked to the LME price, but also the 25% that is linked to the alumina index. We saw somewhat increased production at Alunorte. We saw much better production at Paragominas. It is up from the relatively lower level we had in Q3 due to the planned maintenance.
10.2 million on an annualized basis, record production, and also about the nameplate capacity for the plant. Let me also mention currency. The dollar versus BRL. The dollar appreciated from 2.45 to some 2.66 during the quarter. This, of course, had a positive effect on the unhedged part of the BRL dollar exposure that we have in Brazil. Last but not least, if you look at the Reintegra, which Svein Richard had mentioned, also contributed positively in the quarter with roughly NOK 80 million. Just to remind you what Reintegra is, it provides a tax credit of roughly 3% of the export that we have out of Brazil. These credits, we can either get refunded in cash, or we can use them to offset other federal taxes.
Now, if you look into Q1, from a production perspective, we expect stable production both at Alunorte and Paragominas. The cost improvement program do continue, and we have another NOK 300 million to deliver on the B&A program during the year. We also, for the quarter, we expect somewhat higher energy costs both at Paragominas and Alunorte, in part due to the fact that Paragominas have to go to the market and source new power. Lastly, for the outlook, let me also then just remind you that the currency hedge we had in place for parts of 2013 and 2014 has expired, and for 2015 we will then be fully exposed to the BRL US dollar development.
In Primary Metal, we saw a further improvement in the underlying EBIT following also a strong Q3 result. The underlying EBIT improved NOK 773 million up to NOK 1,989 million or NOK 2 billion if you like. Also here, we have the highest results since 2007. The largest contributor in Primary Metal is the all-in metal prices, which increased from $2,443 to $2,572 or a 5% increase. The development is of course also then aided further by the strengthening of the dollar during the quarter. If you measure this in the Norwegian kroner, the price increase is 13%. Overall, the price effect for the quarter is approximately NOK 1.1 billion positive.
We also had some somewhat higher production in the quarter, up to 499,000 tons, and this is primarily due to the acquisition of Husnes and the integration of Husnes into the books. Working in the opposite direction, seasonally lower sales volumes as we see in the Q4, as well as somewhat higher raw material costs, primarily driven then by higher alumina costs. These two effects had a negative impact of roughly NOK 300 million for the quarter compared to the third. Furthermore, we also saw approximately NOK 100 million in increased power gains in underlying results through the sale of excess power in Brazil, as well as some interregional power compensation in Brazil.
Now, if we look into Q4, we've sold approximately 50% of the production at $1,975 per ton if we exclude Qatalum, as Svein Richard had mentioned. If we look into the premium side, we will continue to see the trend as we have seen during 2014. Given the booking profile we have, we expect premiums to increase another $60 in Q1 compared to what we have delivered in Q4. On the cost side, we foresee somewhat higher raw material costs in Q1, again, due to rising alumina prices, increasing carbon prices. Please remember that we also have US dollar denominated costs, which when you translate this with a higher dollar rate, also will impact cost negatively.
On the power side, we expect 2 effects to have an impact on the Q1 results. First, there is an increase in power costs, driven by an annual shift or annual change in prices, which is gonna impact Q1. Secondly, the increased power gains that I mentioned of NOK 100 million that we realized in Q4 should not necessarily be expected to be repeated in Q1. Also from the fact that the Brazilian government has now capped the power prices at a lower level than what we've seen during 2014. Finally, for primary, as many of you know, there is a severe drought in Brazil. It has been for quite some time. The hydrological balance has been deteriorating.
So far into 2015, this has not improved significantly, even though it's the rainy season in Brazil. It is worth mentioning that in the north, where we have our operations, we have a better hydrological situation than what we have in the southwestern Brazil or the southern parts of Brazil. Due to the integrated system, a rationing in Brazil may also have an impact on our operations. We have no clear indication as to if this will happen, but we will continue to monitor this closely. It's worth noting as a risk for Q1 and onwards. If we quickly turn to Qatalum, we see an underlying net income of NOK 317 million, an increase of NOK 128 million compared to the previous quarter.
These results are of course, again driven by higher realized all-in metal prices for the period, increased sales volumes, but it's also on the back of continued sustained high production at Qatalum, well above the nameplate capacity of the plant. Furthermore, the plant continues to deliver new improvements to ensure that they meet their targets under the $180 improvement program for the joint ventures by the end of 2016. All these efforts together, now brings us to an implied cash cost at Qatalum at the current level of roughly $800 per ton. Importantly also for us is that this, the strong earnings, is also, converted into dividend payments. During 2014, we have received $150 million in Hydro's hands, or for the year. In Q4, we received $50 million.
Metal Markets delivered an underlying EBIT for the quarter of NOK 221 million, up from NOK 171 million in the Q3. Now, if we exclude the currency and inventory valuation effect, the EBIT is NOK 106 million in Q4, down NOK 30 million from the Q3. Well in line with the quarterly guidance of NOK 100 million. The results were primarily influenced by improving results from remelt operations as we continue to see rising product premiums in combination with positive currency effects, giving us a lift in margins. On the other hand, we have a weaker result from marketing, the sourcing and trading activities, which had a negative impact on the results.
If you're looking at the Q1, we continue to see and expect to see higher seasonal volumes at the remelters, as well as an improving and continued improved margins on the premium side. At the same time, as we've seen in this quarter, let me just remind you that the results from the trading activities can be volatile due to the hedging and currency effects. In Rolled Products, we had an underlying EBIT which decreased NOK 147 million, down from NOK 243 million in the third to the Q4. Shipments, as normal, were impacted by seasonality in addition to customer destocking activities. We continue to see margin pressure as premiums continue to decline.
It gives further pressure on the fixed premium contracts that we do have, and there is also a general margin pressure in the market. These negative effects was partly offset by the positive effect that we get from the Rheinwerk smelter, which, of course benefiting from the improving all-in metal prices. Looking into Q1, we expect seasonally higher sales volumes as we normally see in Q1 compared to Q4. However, we expect this to be at a somewhat lower level compared to what we saw in Q1 2014, given the lower starting point we have on the volume side. Premiums have remained at a high level, and as such, we expect continued negative impact on margins related to the fixed premium contracts, as well as a general margin pressure.
In energy, the underlying EBIT increased by NOK 126 million compared to the Q3, giving us an underlying EBIT of NOK 360 million. The primary driver for the result improvement is clearly the higher production that we had during the quarter, reaching 2.8 GWh in the quarter in isolation. The spot sales, on the other hand, increased to a lesser extent due to the fact that we have more concession sales in Q4, which is normal for this part of the year. On the price side, we see the NO2 price as well as the area price differences remaining largely flat from Q3 to Q4.
It is fair to say that the price levels that we've seen during Q4 are very low compared to what we normally see in this season of the year. If you're looking into Q1, we currently see high reservoir levels due to the wet and relatively mild Q4, and particularly in the southwest of Norway, where we have our production. So far, we've started the quarter with approximately 5% higher energy prices in NO2 area than what we saw on the average for Q4. Also, the area price differences between NO2 and NO3 pricing areas has tightened with approximately 60% from 26 NOK per MWh in the Q4 to 11 so far this year.
In Sapa, as expected, and guided, the underlying EBIT for Sapa declined compared to the previous quarter, and this is primarily due to lower seasonal demand. If you compare this to the Q4 of 2013, the underlying EBIT for Sapa increased compared to the same quarter. This is primarily driven by stronger North American demand, improved margins, improvement programs, and the restructuring activities in Europe actually taking effect. Also remember that the results for the Q4 of 2013 was particularly weak due to charges related to impairment of inventories as well as accounts receivable. The restructuring program that we initiated in 2013, targeting annual synergies of around NOK 1 billion, by the end of 2016 is ahead of plan, and about half of the target is now reflected in the underlying results for the year.
Let me just give you a few comments on other and eliminations. We have an underlying EBIT of NOK -308 million for this quarter, versus NOK 349 million for the previous quarter. We've been through the Sapa results, and that brings us onto eliminations as well as corporate costs and other. The elimination of internal gains and losses on inventories was NOK -168 million in this quarter, versus NOK -276 million in the previous quarter. Now, remember that negative eliminations is actually a sign of positive developments in terms of internal sales and improved margins, which is of course just eliminated until we have delivered the products externally. Adjusting for the internal eliminations in Sapa, the result is NOK 118 million in charges for common services and other businesses.
This is a slight improvement from Q3 and very much in line with the long-term guidance that we've given. That brings me on to the net cash or net debt development. We started the quarter with NOK 2.1 billion in net debt at the end of Q3. We generated NOK 4.2 billion in EBITDA, which is up from NOK 1.6 billion in the previous quarter. As we normally see, we had a release of operating capital towards the end of the year. This quarter, it has primarily been driven by reduced inventories and receivables in Rolled Products, but it has been offset by an increase in Primary Metal due to the consolidation of Husnes and aluminum, as well as an increase in the oil and metal price. Altogether, this gives us a release in operating capital of NOK 0.2 billion.
For the quarter, we have a total investment of NOK 1.2 billion. When you net these with compensation that we received for one of the acquisitions or for the acquisition we did in the Q4, and along with some small divestments, we get to a net investment in Q4 of NOK 0.8 billion, as you see on this slide. The last category, other and minorities, includes dividend to minorities as well as currency translation effects on our debt due to the strengthening of the dollar. In addition, it includes the payment for the Paragominas shares that we have acquired in Q4 and the payment to Vale, which are net of certain guarantees given at the time of the transaction. This, at the end of the year, gives us a net debt position at very close to zero, NOK -0.1 billion.
If we look at the annual developments, we started the year with NOK 0.7 billion in cash. We have delivered more than NOK 10 billion in underlying EBITDA, which is an improvement of more than NOK 3 billion compared to 2013. We built operating capital in this period of NOK 2.2 billion, which is primarily as a result of the higher oil and metal prices and currency and volumes. We have other adjustments of a negative NOK 2.2 billion, which primarily relates to taxes. Please remember in this number, there's also a one-time tax payment in Q1 of NOK 600 million. Summing up these items, we have delivered a net cash flow from operations in 2014 of NOK 5.9 billion. We have a total investment of NOK 3.4 billion, which is very much in line with the guidance we gave at Capital Markets Day.
When you net the items that I mentioned on the previous slide, you get to a net investment of NOK 3 billion for the period. We paid dividends of NOK 1.5 billion to the shareholders. Finally, there is the NOK 2.1 billion in currency translation effects related to the dollar-denominated debt and dividends to minorities, again, ending the year at NOK 0.1 billion. Quick on net adjusted debt. We've just been through the net cash development. Other adjustments are fairly similar, which brings me on to the pension line. As you can see, the net pension liability has gone up from NOK 6.6 billion to NOK 8.2 billion in the Q4.
This, again, is primarily driven by an increase in the defined benefit obligation as a result of the lower interest rates in Norway and Germany, in addition to the strengthening of the euro versus the NOK. With that, Svein Richard Brandtzæg, I'll leave the word to you.
Thank you, Eivind. If you look at 2014, important effect was the tightening of the physical market, we saw also improvement in the premiums and also reduction in inventories outside China. We talked about the importance of stabilizing production in Brazil, especially the alumina production in Alunorte. We have not only stabilized it but also lifted the production and at the same time reduced the costs significantly in Brazil. The contributions from our improvement programs are very important.
We communicated during the Capital Markets Day last time, last year, that the improvement programs that we have implemented from 2011 to end 2014 adds up to NOK 3.7 billion. If you look at the yearly result of NOK 5.7 billion, you clearly understand the importance of the improvement programs and the significance of the improvement programs on the bottom line development of Hydro. We will continue to do so in 2015. Now when we see improved earnings outlook, we will clearly demonstrate that we are also able to improve performance and lift targets and deliver better results even in times when we are making good earnings.
We have not only established the performance system in Norway, but we have also now transferred that to Brazil and the performance system, which is a production system, where we have implemented different tools for the operators, where we see that the production is stabilized and also lifted to higher levels, more or less every day, that we are now spreading out in the whole company. It is also important to note that we are continuing to high grade the product portfolio like we are doing in Germany with the body-in-white investment that we decided last year with some profitable small-scale energy investments and also the recycling investments that we decided last year.
Also the pilot at the Karmøy is a good example where we are going to position ourselves as a technology leader because the secret behind the improvements is very much about competence, technology and leadership. Again, we are committed to reduce our CO2 footprint. Our energy consumption is going to be reduced going forward, also in the smelters, not only the pilot. We are also committed to the target of becoming climate neutral from a life cycle perspective in 2020. Thank you very much for your attention.