Norsk Hydro (NHY) Q2 2024 earnings summary

Executive summary

• Q2 2024 adjusted EBITDA was NOK 5.8 billion, with free cash flow of NOK 2.8 billion and adjusted RoaCE at 4.4%, as upstream segments delivered solid results while downstream faced weak demand and low recycling margins.

• Hydro Rein joint venture with Macquarie Asset Management was finalized, supporting renewable energy growth and decarbonization.

• Strategic partnership with Porsche introduced a new business model for low-carbon aluminium, with Porsche paying a green premium and targeting NOK 2 billion earnings uplift by 2030.

• Safety remains a top priority, following a fatal contractor accident at the Albras joint venture in Brazil.

• Strong demand for Hydro CIRCAL, with investments to scale up recycling and new commercial milestones in Europe and the U.S.

Financial highlights

• Q2 2024 revenue was NOK 51 billion, down 5% year-over-year but up 7% sequentially.

• Adjusted EBITDA was NOK 5,839 million, up from NOK 5,411 million in Q1 2024 but down from NOK 7,098 million in Q2 2023.

• Adjusted net income was NOK 1,677 million, with adjusted EPS at NOK 0.97.

• Net debt increased by NOK 2.3 billion during Q2, ending at NOK 26.1 billion.

• Free cash flow for Q2 was NOK 2.8 billion.

Outlook and guidance

• Upstream volumes and higher realized alumina prices expected to support Q3 results, with raw material costs in B&A expected to decrease by NOK 350–450 million.

• Aluminium Metal expects higher LME and premiums but also higher raw material costs and normalized lower sales volumes in Q3.

• Extrusions sales volumes expected to remain soft in Q3, with continued strong sales margins but pressured remelt margins and higher variable costs.

• Metal Markets faces ongoing margin pressure in recyclers and continued volatility.

• Commercial area 2024 adjusted EBITDA guidance (excl. currency/inventory effects) revised to NOK 600–800 million.