Norsk Hydro

Changing the aluminium game - Strengthening position in challenging markets - Seite 2

“With a solid balance sheet, strong improvement drive and targeted measures to free up cash from working capital which surpassed previous guidance, we propose shareholder distributions in line with our policy,” says Aasheim.

Hydro responds with mitigating measures to handle short-term market volatility. Within recycling and Hydro Extrusions, current production flexibility and adaption abilities are utilized to maneuver falling demand. Hydro is reducing inventories to release cash, realizing a working capital release of NOK 3 billion in the fourth quarter, and NOK 7 billion cash effective release for the full year of 2023. Hydro’s robustness is also strengthened as the improvement program and commercial ambitions are ahead of the target, with an accumulated delivery of NOK 11.6 billion by 2023.

These initiatives and Hydro’s solid balance sheet, enable shareholder distributions above previous guidance, as the Board of Directors propose to distribute NOK 7 billion in shareholder distribution, which represents approximately 81.5 percent of the 2023 adjusted net income, as a combination of NOK 2.5 per share of cash dividends, 59 percent of adjusted net income, and NOK 2 billion of share buybacks. The final shareholder distribution for 2023 is subject to approval by the Annual General Meeting (AGM) on May 7, 2024.

During the fourth quarter, an important milestone towards the 2025 strategy was the completion of the USD 1.11 billion transaction for the sale of 30 percent of the Brazilian alumina refinery Hydro Alunorte and Hydro’s 5 percent interest in the bauxite producer Mineracão Rio do Norte (MRN). With the transaction taking place on December 1, 2023, Hydro will be more balanced in relation to the demand of alumina from the aluminium smelter portfolio. The transactions enable capital reallocation into strategic growth areas, strengthening Hydro’s earnings resilience in a rapidly changing global landscape.

Towards 2030, Hydro is stepping up growth investments in Extrusions and recycling, and heightening ambitions in renewable power generation to ensure affordable renewable energy throughout the aluminium value chain at attractive returns. In addition, Hydro remains committed to forcefully executing its decarbonization and technology roadmap, actively contributing to nature conservation and a just transition, and collaboratively shaping the market for greener aluminium in partnership with customers. During the fourth quarter, several strategic steps have been taken toward delivering on the ambitious 2030 targets.