Norsk Hydro (NHY) Q3 2024 earnings summary

Executive summary

• Adjusted EBITDA rose to NOK 7.4 billion in Q3 2024, up 89% year-over-year, driven by higher alumina and aluminum prices, with free cash flow at NOK 1.7 billion and adjusted RoaCE at 7.2%.

• Upstream segments delivered strong results, while downstream (Extrusions, Metal Markets) faced margin pressure from weak demand and lower recycling margins.

• Strategic progress included advancing renewable energy projects, reducing ownership in Vianode, and expanding sustainability partnerships, notably with Mercedes-Benz in Brazil.

• Safety remains a top priority following recent fatalities, with ongoing focus on continuous improvement and operational excellence.

• Ownership in Vianode reduced to 19.9%, with a NOK 1 billion impairment recognized and no further capital to be provided.

Financial highlights

• Q3 2024 revenue was NOK 50.1 billion, up 23% year-over-year, but down 2% sequentially from Q2.

• Adjusted EBITDA increased to NOK 7.4 billion from NOK 3.9 billion year-over-year; adjusted net income was NOK 3.5 billion, with adjusted EPS of NOK 1.49.

• Net income reached NOK 1.4 billion, reversing a loss of NOK 625 million in Q3 2023.

• Free cash flow for the quarter was NOK 1.7 billion; net debt decreased by NOK 1.5 billion to NOK 14.7 billion.

• Impairment of NOK 1 billion related to Vianode, with NOK 600 million impacting EBITDA and NOK 400 million finance expense.

Outlook and guidance

• Alumina and aluminum markets expected to remain tight into Q4, with further price support likely if supply disruptions persist.

• Q4 guidance includes higher realized alumina prices, stable sales volumes, and a continued squeeze on recycling margins; B&A expects higher fixed costs.

• CapEx guidance for 2025+ remains NOK 15–17 billion, including Ilvatn project spend.

• Fuel switch benefits expected to reach $160–$190 million annual run rate by year-end.

• Achieving NOK 8 billion EBITDA target for 2025 in Extrusions requires over 20% volume growth and margin recovery.