Norsk Hydro’s dividend payment for 2021 may surge more than quadruple

Norsk Hydro, a Norwegian aluminium producer, posted record quarterly and yearly earnings on Tuesday, owing to a boom in global commodity prices, and indicated its dividend payout for 2021 will more than quadruple.

In the October-December quarter, adjusted profits before interest, taxes, depreciation, and amortisation (EBITDA) increased to 9 billion Norwegian crowns ($1 billion), up from 3.4 billion the year before. Analysts had expecting 9.31 billion. Global supply-chain bottlenecks, rising energy prices, and inflationary threats are all sources of concern for the organisation.

"There is an increasing uncertainty about the outlook," said Hydro.

Hydro's board suggested a 5.4 crown annual dividend, with 2.0 crowns designated as an exceptional distribution, although analysts had projected a dividend of 4.54 crowns on average. The dividend for 2020 was set at 1.25 crowns.

In the fourth quarter, revenue increased 56% year on year to 46.4 billion crowns, above the average prediction of 14 experts in a poll published by the business of 42.0 billion crowns. Hydro's full-year EBITDA more than quadrupled from 13.1 billion crowns in 2020 to a record 28 billion crowns in 2021.

After climbing 42% in 2021, aluminium prices on the London Metal Exchange are up roughly 18% this year to $3,319 per tonne, moving near on the 2008 high of $3,380.15. For the second year in a row, worldwide demand for the light metal is likely to outpace supply, resulting in a drop in global aluminium stockpiles, according to Hydro.

As the world economy recovers from the epidemic, global commodity demand is surging, and traders are concerned about possible sanctions against Russia over the Ukraine, which might further decrease aluminium supply. Irrespective of this, high power rates in Europe have forced certain energy-intensive aluminium facilities, notably one operated by Hydro in Slovakia, to reduce production.

Norsk Hydro's stock has climbed 12% this year and is trading slightly below its 2008 high. (1 Norwegian crown = 8.9890 dollars) (Oslo newsroom reporting, Terje Solsvik and Sherry Jacob-Phillips editing)