Hydro’s Q4 2024 Earnings Surge on Alumina Price Rally

Hydro

Record Alumina Prices Drive Bauxite Division Profits as Hydro Navigates Mixed Performance Across Segments

Norwegian aluminium producer Hydro posted a significant year-on-year increase in Q4 2024 earnings, driven primarily by record alumina prices and strong performance in its bauxite and alumina division. Supply disruptions in key producing regions and robust demand in China helped push alumina to new highs, directly benefiting Hydro's upstream operations.

In Q4, Hydro’s EBITDA more than doubled to NOK 7.7 billion ($686 million), compared to a weak fourth quarter in 2023. The bauxite and alumina division led the charge, with EBITDA skyrocketing to NOK 4.97 billion from NOK 481 million a year earlier. This unprecedented growth highlights how alumina price volatility can significantly impact upstream aluminium players.

Aluminium Metal Gains Offset by Costs and Tax

While upstream earnings soared, the aluminium metal division reported modest growth. EBITDA rose by just 0.5% year-on-year to NOK 1.95 billion. Although higher all-in metal prices and lower carbon costs provided support, these gains were offset by elevated alumina prices and a NOK 600 million tax settlement in Brazil.

The metal markets division swung to profitability, delivering NOK 319 million in Q4 EBITDA, compared to a loss of NOK 38 million a year prior. This rebound stemmed from improved trading and sourcing, although performance in recycling remained subdued.

Extrusion Division Hit by Auto Sector Weakness

In contrast, Hydro’s extrusion division faced a 60% drop in Q4 earnings to NOK 371 million. The decline was due to weak electric vehicle production, especially in Germany, and declining recycling margins. Despite current challenges, Hydro expects gradual improvement in construction and industrial demand later in 2025, spurred by easing interest rates and consumer spending recovery.

Hydro’s full-year EBITDA for 2024 reached NOK 26.3 billion, up 18% from 2023, reinforcing the company’s diversified strength amid market headwinds. As alumina markets remain volatile, Hydro’s exposure across the aluminium value chain continues to balance risks and rewards.