- Norsk Hydro (NHYDY, Financial) reports a 76% increase in Q1 2025 adjusted EBITDA to NOK 9,516 million.
- Global aluminum consumption rose by 1.5% year-over-year amidst market volatility.
- New investment of NOK 1.65 billion in a Karmøy wire rod casthouse to support low-carbon aluminum initiatives.
Norsk Hydro (NHYDY) announced robust financial results for the first quarter of 2025, with an adjusted EBITDA of NOK 9,516 million, a significant leap from NOK 5,411 million in the same period the previous year. This growth was primarily fueled by elevated alumina and aluminum prices, alongside favorable currency fluctuations.
Free cash flow was recorded at NOK 1.3 billion, with a return on capital employed standing at 10.7%. Meanwhile, global aluminum consumption saw a moderate increase of 1.5% year-over-year. Norsk Hydro is continuing to navigate headwinds in the market, including weak downstream demand and reduced recycling margins in Europe and North America.
In a strategic move to bolster its position in the low-carbon aluminum market, Norsk Hydro is investing NOK 1.65 billion to construct a new wire rod casthouse at its Karmøy smelter, projected to commence operations in 2028. This investment is supported by a substantial EUR 1 billion contract with NKT for the supply of low-carbon aluminum wire rod, underlining the growing demand for greener materials in the market.
Despite challenges such as U.S. trade uncertainties, Hydro's direct exposure to aluminum tariffs remains mitigated due to its strategic domestic sourcing and pass-through pricing methods. Moreover, a significant new long-term power purchase agreement for renewable energy has been secured, ensuring a sustainable supply of energy for future operations.
Looking ahead, Norsk Hydro is revising down its 2025 outlook for its Extrusions business segment due to uncertain market conditions. The company is implementing cost-cutting measures and restructuring efforts, including facility closures in France and the UK, and reducing recycling capacity in response to market constraints. These initiatives are expected to enhance Norsk Hydro's cost position, ensuring competitiveness in an evolving market landscape.
