On Friday, July 1, Norsk Hydro, one of the world’s largest aluminium companies worldwide, announced its financial and operational results for the second quarter of 2023. The company highlighted that it survived the weaker market and price pressure with strong extrusion margins and made good progress on low-carbon aluminium partnerships in Q2 2023 ended June 30.
Hydro’s revenue rose Q-o-Q in Q2 2023 by 10 per cent from NOK 48,534 million to NOK 53.630 million but adjusted EBITDA stood down by 6 per cent from NOK 7,525 million to NOK 7,098 million. On a Y-o-Y basis, both revenue and EBITDA decreased by 17 per cent and 39 per cent, respectively, from NOK 64,793 million and NOK 11,594 million. The reason behind the sluggish result could be lower aluminium and alumina sales prices and downsize volumes in extrusions, but partly offset by positive currency effects and lower raw material costs.
Hydro’s net income from continuing operations was 55 per cent less than the previous year at NOK 5,056 million, while EPS stood at NOK 2.56 versus NOK 5.49. This bearish result reflected the continued economic uncertainty that developed post-pandemic.
Hydro also mentioned in the report that primary aluminium demand declined in the short-term, while China’s supply was gradually returning, leading to a weak global aluminium supply balance over the recent months. Saying that, Hydro’s primary aluminium production in Q2 dwindled by 5 per cent Y-o-Y from 532,000 tonnes to 506,000 tonnes, although slightly grew Q-o-Q by 1 per cent from 499,000 tonnes. Bauxite production also slipped over the year by 4 per cent from 2.736 million tonnes to 2.630 million tonnes, while alumina output remained restrained at 1.542 million tonnes.
Hydro updated in its quarterly results that Hydro Rein is maturing and growing the portfolio to meet the renewable energy demand. In Q2, Hydro produced 2,431 GWh of power versus 1,602 GWh a year ago.
Hydro believes it delivered a robust result amid the challenging time and mitigated risks by improving margins, operational excellence and reducing costs. Hydro is progressing towards achieving the 2027 accumulated improvement and commercial targets of NOK 14 billion combined.
Hilde Merete Aasheim, President and CEO of Hydro, said: “Commercial excellence continues to give good rewards, improving the robustness of our margins in a period with large declines in volumes across Europe and North America. A stronger market position through our greener aluminium product offering separates us from our peers and makes us attractive for partnerships.”
Responses
