Hydro has reportedly announced the first quarter results of 2025 where it has shown positive effects of alumina and all-aluminium prices on its financial performance during the period. However, higher raw material costs, lower extrusion volumes and margins, and lower alumina sales volumes have offset the result to an extent, said Hydro.
Here are the key takeaways from Hydro’s Q1 results:
- Strong upstream results, driven by bauxite and alumina’s record performance
- Suffered from economic uncertainty and risk of low demand due to tariff
- Bearish extrusions outlook due to uncertain markets, leading Hydro to adjust portfolio and cut costs
- Recycling executing on hot metal cost improvements, one-third of 2030 target to be realised in 2025
Financial performance review
In the first quarter of 2025, Hydro earned the revenue of NOK 57,094 million, which was 20 per cent higher than NOK 47,545 million during the corresponding period of the previous year. On a quarter-on-quarter basis, the revenue witnessed an increase of 4 per cent from NOK 55,057 million.
Adjusted EBITDA was NOK 9,516 million in Q1 2025, up by 24 per cent Q-o-Q from NOK 7,703 million and 76 per cent Y-o-Y from NOK 5,411 million. The annual growth in Hydro’s Adjusted EBITDA was primarily driven by the bauxite and alumina sector, recording more than five-fold growth from NOK 804 million in Q1 2024 to NOK 5,135 million in Q1 2025. Over the quarter, the Adjusted EBITDA under Hydro’s bauxite and alumina unit climbed up 3 per cent from NOK 4,969 million.
Adjusted EBITDA in Hydro’s aluminium sector was NOK 2,545 million, up by 30 per cent Y-o-Y from NOK 1,965 million and 31 per cent higher Q-o-Q than NOK 1,949 million. In contrast, Adjusted EBITDA earnings from extrusions were 18 per cent less Y-o-Y, totalling NOK 1,174 million in Q1 2025 versus NOK 1,437 million in Q1 2024. However, over the quarter, it gained 216 per cent than NOK 371 million.
Given the bearish trend in the extrusions EBITDA and amid the rising uncertainty in aluminium product consumptions, Hydro Extrusions has reduced its 2025 outlook to NOK 4.5 billion, whereas it anticipated a growth till NOK 5.5 billion. The current expected EBITDA from extrusions is based on CRU’s 2 per cent growth forecast for the EU and North America combined. But if CRU’s demand growth forecast delays to turn into reality, Hydro’s Adjusted EBITDA estimation will come down to NOK 3.5-4 billion.
Hydro’s net income in the first quarter of 2025 was NOK 5,861 million in Q1 2025 versus NOK 428 million in Q1 2024 and NOK 1,782 million in Q4 2024. That indicated a year-on-year surge of more than 1,000 per cent and a quarter-on-quarter rise of 229 per cent.
Commenting on the Q1 performance, Eivind Kallevik, President and CEO of Hydro, said: "Hydro delivers a strong result in the first quarter, mainly driven by higher alumina and all-in aluminium prices, combined with positive currency effects. In a more unpredictable world, our integrated business model and strong cost position make Hydro more resilient and better positioned to deliver long-term value.”
Mitigating strategy for 2025
Hydro is implementing firm measures to optimise the portfolio and cut costs in response to the prolonged market weakness. Further, restructuring efforts will be executed in 2025 as announced in the fourth quarter of 2024, including the closure of Luce anodising in France and Birtley in the UK, and the curtailment of an additional 30,000 tonnes of recycling capacity in Puget, France. To further improve operational performance, Hydro Extrusions is launching a cost and energy efficient 12-inch automotive line in Hungary, and upgrading the Tønder.
In response to weak market activity tightening aluminium scrap supply, pressuring recycling margins, and reducing remelt production in Hydro Extrusions and Aluminium Metal Recycling, Hydro has also committed to cutting hot metal costs by USD 20 to 30 per tonne by 2030 in recycling. These efforts are accelerating in aluminium metal recycling, with approximately one-third of the targeted 2030 cost reductions expected to be realised already in 2025, just one year into the programme.
Hydro has also started constructing state-of-the-art recycling plant in Torija, Spain, worth EUR 180 million to support long-term ambitions for increased post-consumer scrap use and improved adjusted EBITDA. The facility will add 120,000 tonnes of extrusion ingot capacity and recycle up to 70,000 tonnes of post-consumer scrap annually, further advancing the European circular economy.
US tariff impact on Hydro
Hydro has reported in its annual report that its exposure to the US aluminium tariff is limited due to extensive domestic sourcing and pass-through pricing, with minor cross-border risks. Hydro Extrusions and Aluminium Metal each maintain an average market share of 15–20 per cent in their core segments within the European automotive industry, resulting in limited direct exposure to potential US automotive tariff. Hydro is closely monitoring economic uncertainty and risk of lower demand, and remains focused on securing stable access to the EU market for its Norwegian operations, while optimising its manufacturing value chain across the US, Mexico, and Canada. Mitigation efforts are ongoing, as the company actively adapts to continued global market uncertainty.
