Hydro reports 39% hike in revenue during 2Q2022 on stronger margins in aluminium extrusions business

Hydro has announced strong financial performance for the second quarter of 2022 with a 39 per cent quarter-on-quarter hike in revenue from NOK 46,616 million to NOK 64,793 million. On a year-on-year basis, the revenue has reported a significant rise of 87 per cent from NOK 34,559 million. The company’s total revenue during the first half of 2022 has amounted to NOK 111,409 million, compared to NOK 66,510 million a year ago.

Adjusted EBITDA shows an increase of 4 per cent Q-o-Q for the second quarter of the year from NOK 11,165 million to NOK 11,594 million, while on the year jumps by 76 per cent from NOK 6,598 million. Adjusted EBITDA for the first half of the year has registered a surge of 93.2 per cent from NOK 11,780 million to NOK 22,759 million.

Stronger margins in aluminium extrusions business and currency effects have contributed positively to higher earnings but partly offset by rising raw materials costs. Hydro’s adjusted EBITDA from extrusions has registered a growth of 1 per cent Q-o-Q for 2Q2022 from NOK 2,331 million to NOK 2,365 million and jumped by 29 per cent on year from NOK 1,830 million.

EBITDA from aluminium metal has improved by 46 per cent on quarter from NOK 4,765 million to NOK 6,977 million and augmented by 100 per cent from NOK 2,807 million.

Due to the rise in input costs, Hydro’s EBITDA from bauxite and alumina has dipped by 12 per cent Q-o-Q in Q2 2022 from NOK 1,270 million to NOK 1,117 million. However, on a year-on-year calculation, it has displayed a rise of 31 per cent from NOK 855 million.

Net income from continuing operations has elevated by 74 per cent Q-o-Q from NOK 6,411 million to NOK 11,136 million and surged by 100 per cent over the year from NOK 2,397 million. For the entire first half of the year, net income has heightened from NOK 4,278 million to NOK 17,547 million over the year.

Hilde Merete Aasheim, President and CEO, has said: “I am pleased to see another record quarter for Hydro. The results are backed by strong markets, continued high demand for our greener aluminium products and our ambitious 2025 improvement program, which remains on track.”

She has also said, “I am proud of our dedicated organizations, who have delivered strong performance and good progress on our 2025 strategy. I am also pleased that we can return additional cash to our shareholders, given our strong balance sheet. Following a review of Hydro’s capital structure and targets, the Board of Directors has proposed an additional shareholder distribution. This consists of an additional cash dividend of NOK 3 billion and an introduction of a share buyback program of up to NOK 2 billion.”

But Aasheim has anticipated market uncertainty in the near future, with rising energy prices and narrowing demand for aluminium products. She explained, “Going forward, we see increasing market uncertainty, with rising energy prices and a softening market for aluminium products. We continue to implement initiatives to support our 2025 strategy of low-carbon aluminium and renewable energy. This quarter we have pursued strategic recycling growth projects to meet increasing customer demand for low-carbon aluminium, and we have progressed on our decarbonization roadmap.”