Norsk Hydro Shares Jump After Additional Dividend Plan Unveiled

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Norsk Hydro Shares Jump After Additional Dividend Plan Unveiled
Credit: © Reuters.

By Scott Kanowsky -- Shares in Norsk Hydro ASA (OL: NHY ) surged to near the top of the pan-European STOXX 600 on Friday after the aluminum maker said it would unveil an additional cash dividend and a new share repurchase plan.

In its quarterly results, the company proposed giving an added NOK 3B dividend to shareholders for 2021 following a review of its capital structure and targets. Norsk Hydro will also roll out a share buyback program worth up to NOK 2B over the next 12 months.

The distribution still requires shareholder approval at the group's next extraordinary general meeting.

Adjusted quarterly income before interest, tax, depreciation and amortization also jumped by 76% compared to the previous period last year to NOK 11.59M. The company had estimated the figure to come in at NOK 11.6.

The Oslo-based firm saw a strong performance from its aluminum metal and extrusions divisions, which helped offset higher raw material costs and lower production volumes at its energy unit.

However, Norsk Hydro warned that the economic climate remains uncertain due to supply chain constraints, an uptick in energy prices, soaring inflation, and rising interest rates.

"Hydro is facing a new reality and the changes are happening faster than before," the company said, adding that it will aim to slash costs and focus on growing its renewables business to address these concerns.

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