Norsk Hydro: Solid results amid uncertain markets

Rhea-AI Summary

Norsk Hydro (OTC:NHYDY) reported Q3 2025 adjusted EBITDA of NOK 5,996m, down from NOK 7,367m year‑ago, driven by lower realized alumina prices and a stronger NOK.

Key metrics: free cash flow NOK 2.2bn, 12‑month adjusted RoaCE 11%, and net debt down NOK 1.9bn to NOK 13.6bn. The company launched a workforce and cost reduction program (≈750 white‑collar positions) with gross redundancy costs ~NOK 400m and expected NOK 1bn annual savings from 2026.

Strategic items include an Agreement in Principle to secure power for Alouette through 2045, divestment of Corvus Energy for USD 30m, and a Rotterdam court dismissal of all 2021 claims against Hydro.

Positive

• Free cash flow of NOK 2.2bn
• Net debt reduced by NOK 1.9bn to NOK 13.6bn
• Agreement in Principle secures power for Alouette until 2045
• Program targets NOK 1bn annual run‑rate savings from 2026

Negative

• Adjusted EBITDA down ~18.6% year‑over‑year to NOK 5,996m
• Bauxite & Alumina EBITDA fell from NOK 3,410m to NOK 1,290m
• Rationalization gross redundancy costs of about NOK 400m in 2025

Hydro’s adjusted EBITDA for the third quarter of 2025 was NOK 5,996 million, down from NOK 7,367 million in the same quarter last year. The results decreased from lower realized alumina prices and a stronger NOK. This was partly offset by higher primary and alumina volumes, positive gain from increasing U.S. Midwest premium in Extrusions (metal effect) and realization of previously eliminated internal profits. Hydro generated NOK 2.2 billion in free cash flow, while the twelve month adjusted RoaCE ended at 11 percent.

• Solid cash generation, uncertain extrusion markets

• Executing on strategic workforce and cost reductions

• Future proofing Alouette by signing an Agreement in Principle for long-term power contract until 2045

• Dutch court dismisses all claims against Hydro filed by Brazilian Cainquiama and nine individuals in 2021

• Advancing low-carbon and circular solutions through customer collaborations

"Challenging markets are affecting our third quarter and we experience weaker results. Despite lower adjusted EBITDA, I am pleased to report solid cash generation while we continue to create results in our efficiency and improvement initiatives in order to improve robustness,” says Eivind Kallevik, President and CEO of Hydro.  

In June, Hydro launched a strategic workforce and cost reduction program to future proof the organization and strengthen long-term competitiveness. The initiative includes reducing approximately 750 white collar positions to streamline the organizational structure and enhance profitability. About 600 positions will be reduced in 2025, with estimated gross redundancy costs of around NOK 400 million and expected cost savings of NOK 250 million, resulting in a net 2025 cost of NOK 150 million. Further 150 position reductions are planned for in 2026, mainly through natural attrition. From 2026, the program is expected to deliver annual net run-rate savings of NOK 1 billion, including lower travel and consultancy expenses.

These measures comes in addition to several performance and capital discipline initiatives, thereby complementing the 2030 NOK 6.5 billion improvement program and reduced 2025 capex estimate, further strengthening Hydro’s ability to navigate global uncertainty. The process is being carried out in line with Hydro’s values of care, courage, and collaboration, and in close cooperation with employee representatives.

“Hydro is committed to building resilience, and in an increasingly unpredictable market situation, this program is a significant step. The savings following this program will be an important contribution to our future performance. While such initiatives are challenging, I am encouraged by the thorough and considerate approach taken to ensure that we keep critical resources while adopting to the new reality,” says Kallevik. 

Reliable access to renewable energy remains key to Hydro’s low-carbon aluminium strategy. In the third quarter, Hydro’s joint venture smelter, Alouette, made progress in its global power sourcing initiatives, reaching an Agreement in Principle (AiP) with the Government of Québec and Hydro-Québec to secure renewable power supply for the period 2030 - 2045. The agreement ensures stable, competitive energy in a tightening market and reinforces Alouette’s position as the largest aluminium smelter in the Americas. The parties will now work toward a final agreement, further strengthening Hydro’s global portfolio of long-term renewable power purchase agreements and overall energy resilience.

Hydro is progressing its batteries phase out, as previously communicated on Capital Markets Day in November 2024, in line with its strategic priorities. On October 10, Hydro exchanged its shares in Lithium de France for a 6 percent share in Arverne Group. In addition, Hydro has signed an agreement to divest its entire stake in the maritime battery company Corvus Energy for USD 30 million, with closing expected in early November.

On September 24, 2025, the Rotterdam court issued its final judgment in the case brought forward by Brazilian Cainquiama and nine individuals against Norsk Hydro ASA and its Dutch subsidiaries in 2021. The court fully dismissing all claims brought forward by the plaintiffs, including claims of pollution caused by Alunorte following heavy rains in the region in February 2018. The court’s dismissal was based on both legal and factual grounds. During the proceedings, Hydro presented extensive evidence, including expert analyses and empirical data. On this basis the court confirmed as an established fact, that there were no overflow from the bauxite residue deposits in 2018, and consequently no harm was caused to the environment.

Hydro continues to shape the aluminium market by expanding low-carbon and circular solutions. Since 2022, the company has partnered with Mercedes-Benz to decarbonize the automotive value chain, a collaboration highlighted by the new electric CLA launched this year, which features Hydro REDUXA 3.0 aluminium from the Årdal smelter. This partnership reinforces Hydro’s commitment to transparency, traceability and responsible sourcing in automotive applications. In the infrastructure sector, the Hangarbrua pedestrian bridge in Trondheim exemplifies industrial collaboration and circular innovation. A substantial portion of the material originates from recycled aluminium recovered from the decommissioned Gyda oil platform, showcasing Hydro’s capability to close the recycling loop and transform offshore materials into new, low-carbon applications. The project demonstrates how innovative design and aluminium’s unique properties enable lighter, low maintenance, and longer lasting infrastructure.

Results and market development per business area

Adjusted EBITDA for Bauxite & Alumina decreased compared to the third quarter of last year, to NOK 1,290 million from NOK 3,410 million, mainly driven by lower alumina sales prices, weaker BRL to USD and higher fixed costs. Partly offset by increased sales volume and positive effect from the fuel switch project, which replaces fuel oil with natural gas in the Alunorte refinery.

PAX traded down to USD 321 per mt at the end of the third quarter, from USD 358 at the end of the second quarter, driven by Chinese alumina price trends and a loosening global alumina balance as the production at new refineries in Indonesia continued ramping up as demand stayed stable. China's alumina market was oversupplied, driving domestic prices down towards marginal cash cost. The suspension of some bauxite mining licenses in Guinea reduced bauxite production and exports to China, ending the bauxite price decline started in the first quarter of 2025.

Adjusted EBITDA for Energy increased in the third quarter compared to the same period last year, to NOK 828 million from NOK 626 million. The increase was mainly driven by higher price area gain partly offset by lower production.  

Average Nordic power prices increased compared to the previous quarter and the same quarter last year. The increase in prices from the same quarter last year are primarily due to lower wind and nuclear production. The increase in prices from the previous quarter are mainly due to lower wind and solar production. Price area differences between the south and north of the Nordic market regions increased, both compared to the same quarter last year and the previous quarter, as the northern areas were influenced by strong hydrology and high wind production.

Adjusted EBITDA for Aluminium Metal decreased in the third quarter of 2025 compared to the third quarter of 2024, to NOK 2,732 million from NOK 3,234 million, mainly due to weaker USD to NOK, partly offset by higher sales volume and lower alumina cost.​ Global primary aluminium consumption was flat compared to the third quarter of 2024, with demand growth in China balancing a 1.8 percent decline in demand in the World ex. China. The three month aluminium price increased throughout the third quarter of 2025, starting the quarter at USD 2,599 per mt and ending at USD 2,681 per mt.   

Adjusted EBITDA for Metal Markets decreased in the third quarter of 2025 compared to the same period last year, to NOK 154 million from NOK 277 million, due to lower results from sourcing and trading activities, partly offset by increased results from recyclers.

Adjusted EBITDA for Extrusions increased in the third quarter of 2025 compared to the same quarter last year, to NOK 1,107 million from NOK 879 million, driven by lower cost in combination of somewhat higher volumes. Increasing U.S. Midwest premium (positive metal effect) compensated for pressured sales margins.

European extrusion demand is estimated to have been flat in the third quarter of 2025 compared to the same quarter last year, but decreased 20 percent compared to the second quarter due to seasonality. Demand for building & construction and industrial segments have stabilized at historically low levels with some improvements in order bookings. Automotive demand has been negatively impacted by lower European light vehicle production, partly offset by increased production of electric vehicles.

North American extrusion demand is estimated to have increased 2 percent in the third quarter of 2025 compared to the same quarter last year, but decreased 2 percent compared to the second quarter. Extrusion demand has continued to be weak in the commercial transport segment driven by lower trailer builds. Automotive demand has also been weak. Demand has been positive in the building & construction and industrial segments. While the ongoing impacts from the introduction of tariffs and duties are still uncertain at this stage, order bookings have developed better for domestic producers due to lower imports so far this year.

Other key financials

Compared to the second quarter of 2025, Hydro’s adjusted EBITDA decreased to NOK 5,996 million from NOK 7,790 million, mainly due to lower realization of previously eliminated internal profits, lower realized aluminium price and a stronger NOK, partly offset by reduced raw material costs.

Net income (loss) amounted to NOK 2,149 million in the third quarter of 2025. Net income (loss) included a NOK 206 million unrealized derivative loss, mainly on LME related contracts, and a net foreign exchange gain on risk management instruments of NOK 66 million. The result also included NOK 116 million in rationalization charges and compensation for termination of a power contract of which NOK 251 million is related to future periods. Further, foreign exchange gains of NOK 381 million was also adjusted for. The tax effect on these adjustments reflected a standardized tax rate for taxable gains and tax-deductible losses.

Hydro’s net debt decreased from NOK 15.5 billion to NOK 13.6 billion during the third quarter of 2025. The net debt decrease was mainly driven by EBITDA contribution, partially offset by investments and net operating capital build.

Adjusted net debt decreased from NOK 23.0 billion to NOK 21.1 billion, mainly driven by the decrease in net debt of NOK 1.9 billion, partially offset by increased adjustments of NOK 0.1 billion, driven by increased hedging collateral.

Reported earnings before financial items and tax (EBIT), and net income include effects that are disclosed in the quarterly report. Adjustments to EBITDA, EBIT and net income (loss) are defined and described as part of the alternative performance measures (APM) section in the quarterly report.

Investor contact: 

Elitsa Blessi

+47 91775472 

Elitsa.Blessi@hydro.com  

Media contact: 

Halvor Molland 

+47 92979797

Halvor.Molland@hydro.com

The information was submitted for publication from Hydro Investor Relations and the contact persons set out above. Certain statements included in this announcement contain forward-looking information, including, without limitation, information relating to (a) forecasts, projections and estimates, (b) statements of Hydro management concerning plans, objectives and strategies, such as planned expansions, investments, divestments, curtailments or other projects, (c) targeted production volumes and costs, capacities or rates, start-up costs, cost reductions and profit objectives, (d) various expectations about future developments in Hydro's markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, and (i) qualified statements such as "expected", "scheduled", "targeted", "planned", "proposed", "intended" or similar. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty.  

Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include, but are not limited to: our continued ability to reposition and restructure our upstream and downstream businesses; changes in availability and cost of energy and raw materials; global supply and demand for aluminium and aluminium products; world economic growth, including rates of inflation and industrial production; changes in the relative value of currencies and the value of commodity contracts; trends in Hydro's key markets and competition; and legislative, regulatory and political factors. No assurance can be given that such expectations will prove to have been correct. Except where required by law, Hydro disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This information is considered to be inside information pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.

Attachments

• NHY presentation Q3 2025
• Report Q3 2025

FAQ

What were Norsk Hydro's Q3 2025 adjusted EBITDA and net income (NHYDY)?

Adjusted EBITDA was NOK 5,996m and net income was NOK 2,149m for Q3 2025.

How much free cash flow did NHYDY generate in Q3 2025 and how did net debt move?

Hydro generated NOK 2.2bn free cash flow and net debt fell by NOK 1.9bn to NOK 13.6bn.

What cost savings and charges did Hydro announce in October 2025 (NHYDY)?

Hydro plans to cut ≈750 white‑collar roles, with gross redundancy costs ~NOK 400m and expected NOK 1bn annual savings from 2026.

What is the significance of the Alouette power Agreement in Principle for NHYDY?

The AiP secures long‑term renewable power supply for Alouette for 2030–2045, improving energy stability and competitiveness.

Did the Rotterdam court ruling affect Norsk Hydro's legal exposure from 2021 claims?

Yes. On 24 Sep 2025 the Rotterdam court dismissed all claims filed in 2021 against Hydro and its Dutch subsidiaries.

What divestments did Hydro complete in October 2025 and what proceeds are expected (NHYDY)?

Hydro agreed to divest its stake in Corvus Energy for USD 30m, with closing expected in early November 2025.