Hydro posts higher Underlying EBIT in FY2020 at NOK 6,051 million even amid lower net income of 21% Y-o-Y

Hydro’s reported Underlying EBIT in FY2020 stood at NOK 6,051 million compared to NOK 3,359 million in FY2019 and NOK 9,069 million in FY2018. This reflects year-on-year growth of 80.14 per cent but a decrease of 33.28 per cent than in 2018.

Underlying EBIT from bauxite and alumina stood 85.42 per cent higher in 2020 at NOK 1,806 million in comparison with NOK 974 million in 2019 but fell by 20.86 per cent from NOK 2,282 million in 2018. From primary aluminium, Hydro generated an Underlying EBIT of NOK 1,225 million in 2020, flat compared to NOK 1,259 million in 2019 but down by 30.48 per cent from NOK 1,762 million in 2018.

EBIT from extrusions stood at NOK 2,196 million in 2020, up by 9.31 per cent from NOK 2,009 million in 2019 but down by 15.94 per cent from NOK 2,390 million in 2018.

However, despite the year-on-year surge in Underlying EBIT, Hydro’s full-year net income lowered by 20.96 per cent from NOK 2,370 million in 2019 to NOK 1,660 million in 2020.

Net cash flow from operations in 2020 amounted to NOK 13.5 billion, supported by NOK 2.4 billion in net operating capital release. Net investments amounted to NOK 8.3 billion.

Hydro President and CEO Hilde Merete Aasheim wrote in her letter to shareholders, “The pandemic put us all to the test last year. Yet, Hydro managed an extraordinary 2020 carefully, emerging stronger and well positioned to deliver on our agenda to become a profitable and more sustainable industry leader.”

“I’m grateful and impressed by how our organization kept the wheels turning, delivering on the improvement ambitions and positioning Hydro for the future, while always putting health and safety first,” she added.

The company’s rate of recordable injuries per million work hours improved to 2.7 in 2020 from 3.0 in 2019.

Hydro also exceeded its improvement target and achieved savings of NOK 4.2 billion for 2020, amounting to about half of the overall 2025 ambition. Hydro’s another notable achievement in 2020 included successful verification of the Karmøy Technology Pilot in Norway, which produced primary aluminium with 15 percent lower specific energy consumption and significantly lower greenhouse gas emissions compared with the world average.

Hydro noted global primary aluminium consumption decreased by 3.7 percent to 62.1 million tonnes in 2020. Global supply increased by 2.7 percent to 64.9 million tonnes resulting in global surplus of around 3 million tonnes. For 2021, global primary aluminium demand is expected to increase by 7-8 percent and aluminium production is expected to increase by 6-7 percent, resulting in a continued but lower global surplus in 2021 compared to 2020.