Norsk Hydro

Third quarter 2020 - Strong cash generation, improving markets

Hydro’s underlying EBIT for the third quarter of 2020 was NOK 1,407 million, up from NOK 1,366 million in the same quarter last year. Extruded Solutions saw improving volumes from the previous quarter and a favorable cost position. The extended maintenance at the Paragominas bauxite pipeline in Brazil is finalized, and the Alunorte alumina refinery is ramping up production

• Underlying EBIT NOK 1,407 million
• Strong cash generation
• Markets continue recovery from Q2 lows
• Extruded Solutions uEBITDA up 28% vs Q3 2019
• Paragominas maintenance finalized, Alunorte ramping up to nameplate capacity
• RSK value secured through Hydro-Lyse transaction
• Positive developments in EU regulatory framework

“Our top priority is the health and safety of our people and the communities where we operate. Hydro’s organization is maneuvering the Covid-19 situation, protecting people and operations while generating cash. I am pleased to see strong cash generation as a result of our efforts. At the same time, we are pursuing our profitability and sustainability agenda, strengthening our low-carbon position and exploring new growth areas,” says President and CEO Hilde Merete Aasheim.

Extruded Solutions experienced a faster-than-expected recovery, especially in Europe, a favorable cost position and insurance compensation of NOK 192 million related to the cyber-attack in 2019. Reduced raw material costs, improved fixed costs and positive currency effects, as both the NOK and BRL weakened against the USD and EUR, all contributed positively to the third quarter result. The positive elements were offset by a lower result from Bauxite & Alumina, due to the Paragominas maintenance and reduced realized alumina and aluminium prices.

On August 18, Hydro halted operation of the pipeline transporting bauxite from Paragominas to Alunorte for extended maintenance to replace a section of the pipeline earlier than planned, temporarily halting production at Paragominas and reducing production at Alunorte to 50 percent of full capacity. On October 8, Paragominas resumed production. Alunorte is now ramping up production towards nameplate capacity.

“I am happy to see Alunorte back on track and ramping up production. We have also decided to resume full production at our Husnes plant in Norway by end of November, after running at half capacity since the financial crisis in 2009. Husnes is among the most climate-efficient aluminium plants in the world, producing a material acknowledged by the European Union as an essential building block for the low-carbon, circular society,” says Aasheim.