Norsk Hydro

Well positioned in declining markets, low-carbon aluminium gaining ground

Hydro’s adjusted EBITDA for the second quarter of 2023 was NOK 7,098 million, down from NOK 11,594 million for the same quarter last year. This resulted in an adjusted RoaCE of 14 percent over the last twelve months. Results are down on lower aluminium and alumina sales prices as well as lower volumes in Extrusions, partly offset by positive currency effects and lower raw material costs.

Highlights for the quarter:

• Robust results and strong extrusion margins, despite weaker markets and price pressure
• Improvement program and commercial ambitions on track for 2023 targets
• Alumetal acquisition significantly strengthens recycling position in Europe
• Good progress on low-carbon aluminium partnerships
• Increased 2023 capex guidance on currency translation, inflation and return-seeking investments

“The results reflect a weaker market, but also the effect of our continuous improvement initiatives throughout the organization. These improvement efforts are key to ensuring robustness and strengthening our value creation when markets are declining,” says President and CEO, Hilde Merete Aasheim.

Health and safety remain Hydro’s top priority for both employees and the communities where the company operates. The total recordable injury rate (TRI) is stable at a low level of 2.3 at the end of the quarter.

Demand for primary aluminium is declining in the short-term, while Chinese supply is returning, leading to the global primary balance weakening in recent months. In challenging markets, Hydro continues to deliver solid results and mitigate risks by improving margins, operational excellence and reducing costs. Continuous improvements strengthen the position on cost curves and ensure robustness.  Hydro is on track to deliver on the full year improvement program target of NOK 8.4 billion. Standing strong and delivering in short-term uncertainties provides a solid foundation for pursuing long-term opportunities. Hydro is making progress towards achieving the 2027 accumulated improvement and commercial targets of NOK 14 billion combined.

“Commercial excellence continues to give good rewards, improving the robustness of our margins in a period with large declines in volumes across Europe and North America. A stronger market position through our greener aluminium product offering separates us from our peers and makes us attractive for partnerships,” says Aasheim.

During the second quarter, European and North American demand for extrusions have decreased significantly compared to the same quarter last year. Despite falling markets, Hydro Extrusions continues to deliver margin robustness through dedicated improvement efforts, by proactively adjusting costs and gaining market share, margin uplift, and benefiting from greener product offering. These efforts have shown strong results compared to our peers and strengthen the roadmap to deliver NOK 8.0 billion adjusted EBITDA for Hydro Extrusions in 2025.