Norsk Hydro Reports Alumina Output Decline, but Strong Earnings in Third Quarter of 2024

Norsk Hydro

Alumina Production Declines, Sales Surge

Norwegian aluminum producer Norsk Hydro has released its third-quarter results for 2024, revealing a drop in alumina production but an increase in alumina sales. Despite producing only 1.46 million metric tonnes of alumina in the third quarter, down from 1.52 million tonnes the previous year, Hydro sold 2.7 million tonnes of alumina, an increase of 508,000 tonnes from the same period in 2023. To make up for the shortfall in production, Hydro sourced an additional 555,000 tonnes of alumina.

Strong Performance in Other Production Segments

While alumina production declined, other production segments remained stable. Primary aluminum production saw only a minor decrease of 1,000 tonnes, totaling 511,000 tonnes. Hydro's aluminum metal segment sold 71% of its expected primary aluminum production for the fourth quarter of 2024, at an average London Metal Exchange (LME) price of $2,445 per tonne, slightly below the current LME settlement of $2,600 per tonne.

In addition, Hydro experienced a decline in extrusion sales volumes, which dropped by 20,000 tonnes to 240,000 tonnes. Despite this, demand for extrusion products is expected to rebound in 2025, as the Federal Reserve is anticipated to lower interest rates. Recycling production also saw a decline of 6,000 tonnes, reaching 170,000 tonnes for the quarter.

Significant Increase in Alumina Earnings

Hydro's bauxite and alumina sector reported a remarkable increase in earnings before financial items, tax, depreciation, and amortization (EBITDA), reaching 3.5 billion Norwegian Krone ($318 million). This impressive performance was primarily driven by the rise in the realized alumina price from $349 per tonne to $494 per tonne. Additionally, lower raw material costs and favorable currency effects contributed to the substantial 25-fold increase in EBITDA compared to the same period in 2023.

Robust Overall Profit for the Quarter

Norsk Hydro reported a strong overall profit of 3.506 billion NKr for the third quarter of 2024, marking a significant increase from the 345 million NKr profit in Q3 2023. This surge in profitability reflects Hydro's ability to capitalize on rising alumina prices and its strategic management across various production sectors.