Hydro’s Q3 2023 revenue declines 15% Y-o-Y due to bearish aluminium prices; measures to mitigate crisis are underway

Lower extrusions and recycling volumes, coupled with bearish alumina and aluminium prices, led to a bigger-than-expected drop in Norsk Hydro’s financial output in the third quarter of 2023 ended September 30. On Monday, October 23, Hydro released its Q3 CY2023 fiscal report, announcing a 15 per cent revenue fall year-on-year from NOK 52,445 million to NOK 44,702 million. On a quarter-on-quarter calculation, the decline was 17 per cent from NOK 53,630 million.

In the first nine months of the year, Hydro’s revenue was recorded at NOK 146,865 million, down by 10.37 per cent from NOK 163,854 million during the corresponding period of the last year.

The company’s adjusted EBITDA plunged by 60 per cent Y-o-Y from NOK 9,721 million to NOK 3,899 million. Thus, the EBITDA from January to September totalled NOK 18,522 million compared to NOK 32,480 million a year earlier.

From bauxite and alumina, Hydro’s EBITDA shrank by 85 per cent Y-o-Y and 89 per cent Q-o-Q during Q3 2023 to NOK 93 million. EBITDA from aluminium metal and extrusions stood at NOK 1,379 million and NOK 1,322 million, respectively, down by 79 per cent and 5 per cent year-on-year.

Nosrk Hydro experienced an overall hit by the challenges in the global economy due to rapid monetary tightening and narrow business investments. Moreover, demand for extrusions was less due to the poor market status of the building & construction industry.

Hydro has thus started taking measures to mitigate the crisis, including production flexibility and adoption abilities to manoeuvre falling demand.

“Hydro is responding to declining markets with firm mitigating measures. Within Hydro Extrusions and recycling, we are using our production flexibility and adaption abilities to maneuver in weaker markets,” said Hilde Merete Aasheim, CEO of Norsk Hydro.

Hydro also mentioned in its report that it is on track to deliver on the 2025 strategy, i.e. to strengthen its position in low-carbon aluminium. The company also said it aims to add 1 million tonnes of new recycling capacity to the portfolio by 2027, primarily in Europe and North America, to meet the growing demand for recycled aluminium.

“Despite market volatility and geopolitical turmoil, the long-term outlook for aluminium is promising. Toward 2030, Hydro expects significant growth for aluminium, driven by electric vehicles, energy effective buildings as well as aluminium in infrastructure to support the energy transition,” said Aasheim.