Norsk Hydro

Third quarter 2020 - Strong cash generation, improving markets - Seite 2

Global GDP and industrial production have recovered during the quarter, but the Covid-19 situation continues to cause market uncertainty. The global fall in demand and government-imposed restrictions have negatively affected operations during the quarter. The Covid-19 situation has mostly affected Extruded Solutions and Rolled Products, although order intake and capacity utilization have improved. Bauxite & Alumina, Primary Metal, Metal Markets recycling facilities and Energy have been operating largely as normal during the quarter.

Hydro’s improvement efforts are moving forward with full speed, focusing on the cost levers we can control in these uncertain times. The target NOK 4.1 billion by 2020 is behind plan due to the pipeline maintenance. However, the overall 2023 goal of NOK 7.3 billion in improvements remains.

The EU's revised guidelines for CO2 compensation pave the way for continued production of low-carbon aluminum in Norway. For Hydro's renewable energy-based aluminum production, predictable and robust compensation of the actual CO2 surcharge in power prices will make a critical contribution to our operations. “Low-carbon aluminium products can play a crucial role in reducing global CO2 emissions, meeting the growing demand for these products in a number of sectors, including transport and construction,” says Aasheim.

In addition, The European Commission announced on September 22, 2020, its decision to impose provisional antidumping duties on aluminium extrusions originating in China. The duties are an outcome of an investigation opened in February 2020. The European Commission has now found that Chinese extrusions have been sold in the European Union at prices so low that they can be considered dumping and unfair competition to EU producers.

For Hydro’s around 40 extrusion plants in Europe, the antidumping action is a move that will mitigate unfair competition. For Hydro’s customers, this will contribute to making sure Europe continues to have a viable extrusion industry which will still face strong competition due to the many players in the market.

Hydro's net debt position decreased from NOK 13.2 billion to NOK 9.9 billion at the end of the quarter. Net cash provided by operating activities amounted to NOK 4.5 billion. Net cash used in investment activities, excluding short term investments, amounted to NOK 1.5 billion.

Hydro held NOK 17.5 billion in cash and cash equivalents and NOK 4.2 billion short-term deposits, included in short-term investments, at the end of the third quarter. The revolving credit facility of USD 1.6 billion was fully available at the end of the quarter.

Investor contact:

Line Haugetraa,
Head of Investor Relations,
[phone]
[e-mail]

Press contact:

Halvor Molland,
Senior vice president, Media Relations
[phone]
[e-mail]

This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act

Attachments

• Q3 2020 Report
• Q3 2020 Presentation