Investing.com -- Norsk Hydro (OL:NHY) on Friday reported strong fourth-quarter 2024 results, with substantial growth in key areas.
Year-over-year revenue increased by 18% to NOK 55.1 billion, fueled by elevated alumina prices and favorable currency exchange rates.
Adjusted EBITDA more than doubled compared to the same period last year, reaching NOK 7.7 billion, primarily due to the strong performance of the Bauxite & Alumina (OTC:AWCMY) segment.
The aluminium and renewable energy company reported a net income of NOK 1.78 billion, a swing from the NOK 2.77 billion loss recorded in the fourth quarter of 2023.
The Bauxite & Alumina segment emerged as a key revenue driver, posting an adjusted EBITDA of NOK 4.97 billion, up from just NOK 481 million in the same period last year.
This improvement was fueled by a surge in alumina prices, which peaked at USD 805 per tonne in December before settling at USD 672 per tonne by quarter-end. However, higher costs related to social projects in Brazil partially offset these gains.
Hydro Energy also delivered strong results, with adjusted EBITDA rising 43% year-over-year to NOK 1.15 billion.
The increase was attributed to recognized insurance compensation for a power plant outage, as well as compensation for the termination of the Markbygden power purchase agreement.
Lower electricity prices in Norway compared to the previous year were offset by strategic trading gains.
In contrast, the Aluminium Metal segment remained relatively stable, recording an adjusted EBITDA of NOK 1.95 billion, only slightly above the NOK 1.94 billion reported in Q4 2023.
Higher all-in metal prices and reduced carbon costs were countered by increased alumina costs and a tax settlement in Brazil amounting to approximately NOK 600 million.
Global primary aluminium consumption increased by 2.7% compared to the same quarter last year, with non-China consumption growing at a slightly higher rate of 3.2%.
The Metal Markets segment rebounded strongly from a weak performance in Q4 2023, with adjusted EBITDA improving from a loss of NOK 38 million to a profit of NOK 319 million.
The gains were largely driven by sourcing and trading activities, as well as positive currency and inventory valuation effects, though the division continued to face challenges in the recycling segment due to tight scrap supply.
Hydro Extrusions posted a decline, with adjusted EBITDA dropping 60% year-over-year to NOK 371 million. Weaker demand for extruded products, particularly in the European automotive sector, contributed to this decline. European extrusion demand fell 8% year-over-year, largely due to subdued electric vehicle sales and a slowdown in commercial transport and industrial segments.
In North America, extrusion demand was down 1% from the previous year, with the commercial transport segment showing particular weakness.
On the financial front, Hydro's net debt increased to NOK 16 billion from NOK 14.7 billion in the previous quarter, driven by investments, share buybacks, and foreign exchange effects.
The board has proposed a shareholder distribution of NOK 4.5 billion, representing 50% of the adjusted net income for 2024.
The proposal includes a cash dividend of NOK 2.25 per share, pending approval at the Annual General Meeting in May 2025.
“While the global primary aluminium consumption was up 2.7 percent compared to the same quarter last year, driven by a 3.2 percent increase in world ex-China, the downstream aluminium market continues to face weak demand and tight recycling margins in Europe and North America,” the company said in a statement.
Additionally, the imposition of new U.S. tariffs on aluminium imports is expected to raise premiums, though Hydro’s exposure to cross-border trade remains limited.
The company has taken proactive measures to optimize costs and maintain operational flexibility, including workforce reductions and facility closures in underperforming regions.