Hydro needs to extend cost cutting as primary move for improvement programmes: Aasheim opines

Norsk Hydro ASA’s new President and CEO Hilde Merete Aasheim is of an opinion that the company needs to extend its cost cutting after a production halt in Brazil.

She said in a statement, “We’ve been heavily affected by the Brazil situation. The effect of the improvement programs was erased to zero because the volumes fell significantly. We will re-establish the improvement programs, but also accelerate and see what more we can do.”

Aasheim also intimidated that federal judge in Brazil would expectedly give final approval to restart the Alunorte refinery. However, the timing remains uncertain.

The yearlong 50 per cent production cut at the world’s largest refinery has hurt Hydro’s earnings and weighed on its shares, leading to a drop by about 40 per cent since February 28, 2018.

The company’s woes intensified further when its production crippled for a few days due to a cyber-attack in March 2019. The estimated financial impact of the attack was as much as 450 million kroner ($51 million) in the first quarter.

Rolled products including materials for cans, cars, and buildings are one particular area that Aasheim thinks need major improvement after a long period of weak earnings.

“We will look at the whole business area and explore the possibilities to make it better,” she said. “Earnings have been low, projects haven’t delivered fully -- we need to do a full review of our position and how we can improve earnings.”

From August 15, Einar Glomnes, the former head of global joint ventures in the primary metal division, will now head the rolled products operation, while Pal Kildemo, head of finance in primary metal, will serve as the chief financial officer replacing Eivind Kallevik.