Finance
Aluminium producer Norsk Hydro core profit misses forecast, cuts extrusions outlook
Published by Global Banking and Finance Review
Posted on April 29, 2025
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Published by Global Banking and Finance Review
Posted on April 29, 2025
By Jesus Calero
(Reuters) -Norwegian aluminium producer Norsk Hydro reported a 76% jump in first-quarter core profit on Tuesday on higher metal prices and currency gains, slightly missing estimates, while it cut its extrusion segment's outlook on weaker downstream demand.
The company revised its 'Extrusions' segment's 2025 annual adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) outlook to approximately 4.5 billion Norwegian crowns ($433.97 million), down from an earlier forecast of 4.5-5.5 billion crowns due to rising uncertainty.
However, if demand growth expectations from global metals research firm CRU are further delayed, adjusted EBITDA is estimated to range between 3.5 billion crowns and 4.0 billion crowns, Hydro added.
The downstream aluminium market continued to face headwinds during the January-March quarter, with weak demand and compressed recycling margins in both Europe and North America.
Adjusted EBITDA rose to 9.52 billion crowns in the January-March period, from 5.41 billion crowns a year earlier. Analysts on average had expected it to report a core profit of 9.86 billion crowns, according to a company-compiled consensus.
The return of U.S. tariffs on aluminium has roiled trade flows and pushed physical market premiums to record highs, amplifying cost pressures for American buyers and redrawing global supply lines.
As the U.S. remains heavily reliant on imports, with Canada alone supplying over two-thirds of its aluminium, the new 25% levies have made it costlier to bring in foreign metal.
However, Hydro CEO Eivind Kallevik said in a statement that the trade conflict is unlikely to directly impact the company.
"We are closely monitoring the situation and remain ready to adapt to market changes, particularly if reduced consumer confidence leads to broader economic uncertainty."
With Chinese smelters churning out record volumes of aluminium and looking to offload surplus abroad, barriers in the West have offered short-term relief to companies such as Hydro by lifting regional premiums and curbing low-cost competition.
Hydro said it remained focused on securing European market access for its Norwegian operations and optimizing its North American manufacturing value chain.
($1 = 10.3693 Norwegian crowns)
(Reporting by Jesus Calero; Editing by Jacqueline Wong and Rashmi Aich)