Norsk Hydro (NHY) Q2 2025 earnings summary

Executive summary

• Adjusted EBITDA for Q2 2025 reached NOK 7.8 billion, with free cash flow of NOK 5 billion and adjusted RoaCE at 12%, reflecting strong results amid uncertain markets.

• 2025 capital expenditure target reduced by NOK 1.5 billion to NOK 13.5 billion, with an external hiring freeze and workforce review to enhance efficiency and flexibility.

• Improvement programs are ahead of target, with significant cost reductions, efficiency gains, and greener product sales up nearly 50% year-over-year.

• Maintained a strong safety record, with a continued downward trend in injuries and high-risk incidents.

• Terminated Nordic power purchase agreement, securing up to EUR 90 million in compensation, highlighting risks in the wind market.

Financial highlights

• Q2 2025 revenue was NOK 53,116 million, up 4% year-over-year but down 7% sequentially from Q1.

• Adjusted EBITDA was NOK 7,790 million, down from NOK 9,516 million in Q1, with adjusted net income of NOK 3,998 million and adjusted EPS at NOK 1.68.

• Free cash flow reached NOK 5 billion in Q2.

• Net debt at quarter-end was NOK 23 billion, mainly due to shareholder distributions.

• Adjusted net income for Q2 2025 was NOK 3,577 million, more than double the prior year.

Outlook and guidance

• 2025 CapEx guidance reduced by NOK 1.5 billion to NOK 13.5 billion, mainly affecting recycling and extrusion projects.

• 2026 CapEx guidance remains at NOK 15 billion, pending review later in the year.

• Near-term focus on operational efficiency, cost control, and maintaining flexibility amid geopolitical and regulatory uncertainty.

• Q3 expected to see higher bauxite costs due to maintenance, stable alumina prices, and lower raw material costs for aluminium metal.

• Metal effect in extrusions expected to be NOK 200–300 million in Q3 if Midwest premium remains elevated.