Norsk Hydro posted stronger-than-expected fourth-quarter operating profits and plan to pay out a larger share of its profits as dividend from 2021 onwards.

Underlying earnings before interest and tax (EBIT) rose to 1.45 billion Norwegian crowns ($170.7 million) from 560 million crowns a year earlier, beating the 1.34 billion crowns expected in a poll of analysts.

“The pandemic made 2020 a challenging year for all. Health and safety of our people and the communities where we operate is top priority. Hydro is following recommendations from local and international health authorities, updating contingency plans to avoid disruptions, and securing deliveries to customers,” says president and CEO Hilde Merete Aasheim.

During the fourth quarter 2020, global industrial production continued to recover from its contraction earlier in the year, while GDP remained largely flat. The aluminium market ended 2020 with a surplus of around 3 million tonnes, lower than estimates of around 5 million tonne surplus earlier in 2020.

“I am impressed by our organisation managing to keep the wheels turning in a year marked by the pandemic, at the same time delivering on our improvement targets,” says Aasheim. 

“We exceeded our cost improvement target and achieved savings of NOK 4.2 billion for 2020, amounting to about half of the overall 2025 ambition and supporting the positive cash flow generation in the fourth quarter.”

Chief Financial Officer, Pål Kildemo, added: “Hydro’s volume growth outpaced the market development in both Rolling and Extrusions in the fourth quarter 2020, driven by recovery in key segments such as automotive, can, building and construction. 

“Within Aluminium Metal, Hydro’s mix of value-added versus standard products recovered to historic levels of around 70 percent value-added. Hydro’s operations have been operating largely as normal during the quarter. The Covid-19 situation, however, continues to cause market uncertainty.”

Read the full report here.

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