Norsk Hydro posted strong figures in the first quarter 2021 including record results in the energy and extrusion business areas amid a strong global recovery and boost for demand for renewable energy, aluminium and aluminium products.

The company’s first-quarter underlying EBITDA of NOK 5,182 million was up from NOK 3,810 million in the same quarter last year. 

Higher all-in metal prices, improved results from Energy and improved margins and volumes in Extrusions contributed positively to the result. 

These positive elements were partly offset by higher raw material costs, negative currency effects and additional maintenance-related costs in the Bauxite & Alumina business area.

Hydro continues to address the effects of the Covid-19 pandemic on its operations and communities around the world. 

“Our top priority has been the health and safety of our people and the communities where we operate. Covid-19 initiatives have been implemented in our operations globally to support employees and prevent infections. In Brazil, Hydro has also provided support to the local communities in their efforts to handle the pandemic,” says President and CEO Hilde Merete Aasheim.

The first quarter saw a strong global recovery driven by the re-opening of economies and substantial fiscal stimulus. As a result, Hydro saw a decreasing oversupply in the primary aluminium market, and analysts now expect a largely balanced market for 2021. 

“I am pleased to see earnings and returns picking up across most of our operations on higher margins and volumes, but also on continued low costs, especially in Extrusions,” says Aasheim.

Hydro Extrusions achieved record results this quarter, driven by strong volume growth, improved margins, and continued cost savings from improvement program initiatives. 

Hydro Energy also experienced a record quarter, driven by higher power prices, production volumes and the expiry of legacy power contracts.

The quarter also saw strong demand for Hydro’s low-carbon aluminium products, Hydro CIRCAL and Hydro REDUXA. The volume of Hydro REDUXA sold in the first quarter was approximately 60% of the total Hydro REDUXA volume sold in 2020. 

On March 5, 2021, Hydro entered into an agreement to sell its Rolling business to KPS Capital Partners for EUR 1,380 million (around NOK 14.2 billion) on an enterprise value basis, resulting in EUR 435 million of cash proceeds. 

The sale of Rolling will strengthen the company’s ability to deliver on the 2025 strategy. Completion of the transaction is expected to take place in the second or third quarter of 2021. 

Following the sale of the Rolling business, the revised 2025 improvement target is now NOK 7.4 billion. 

Of this, NOK 5.1 billion is targeted by end of 2021 compared to the baseline of 2018. In addition, Hydro is pursuing market and customer-driven opportunities in its current aluminium portfolio, aiming to realise NOK 1.5 billion in commercial ambitions by 2025. Based on progress in the first quarter, the improvement program is expected to exceed the year-end target. 

Compared to the fourth quarter 2020, Hydro’s adjusted EBITDA increased from NOK 3,403 million to 5,182. Higher realised alumina and aluminium prices, improved results from Energy, and higher sales from Extrusions were partly offset by higher raw material costs and negative currency effects.

For more on Hydro’s results for the first quarter of 2021, visit the company’s website.

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