Oslo  -  A weak dollar impacted first quarter 2008 earnings, Norwegian aluminium and power generation group Norsk Hydro reported Tuesday.

Underlying earnings before interest and tax dropped to 2.03 billion kroner (405 million dollars), compared to 2.88 billion kroner for the corresponding business period 2007, the group said.

The company said global aluminium prices remained strong in the quarter, but that it realized lower prices in Norwegian kroner due to the weaker US dollar rate against the Norwegian currency.

Hydro posted turnover of 21 billion kroner in the first quarter, down 16 per cent from the first quarter 2007.

In its outlook, Hydro said aluminium inventories are currently low compared to consumption, and growth mainly in China was expected to increase demand for primary aluminium by some 8 per cent.

Last year, Hydro combined its gas and oil business with Norwegian rival Statoil to focus on its aluminium and power generation activities. (dpa)