Norsk Hydro: Solid upstream performance driving strong cash flow generation

Hydro’s adjusted EBITDA for the fourth quarter of 2025 was NOK 5,587 million, down from NOK 7,701 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 and lower raw material costs. Hydro generated NOK 4.6 billion in free cash flow, while the twelve month adjusted RoaCE ended at 10.2 percent.

• Alunorte alumina production above nameplate capacity, aluminium smelter production up 2.5 percent year on year

• Securing power for the Norwegian smelter system with two long-term power contracts and power plant investment

• Strategic workforce reduction completed and Extrusion Europe restructuring progressing according to plan

• Proposed dividend of NOK 3.0 per share  

"Strong aluminium metal prices continued to provide tailwinds in the fourth quarter, driving near-record earnings in our primary aluminium business and offsetting weak downstream markets. This highlights the robustness of Hydro’s financial position and diversified portfolio,” says Eivind Kallevik, President and CEO of Hydro.  

The fourth quarter saw strong operational performance in the upstream segments. Alumina production at Alunorte exceeded nameplate capacity supported by improved refinery flow and high equipment availability. In Aluminium Metal the ramp up of the previously curtailed capacity at the Norwegian smelters continues and the quarterly production increased by 2.5 percent year on year.

EBITDA for the quarter ended at NOK 5,587 million. Despite seasonally higher investments in the fourth quarter, the free cash flow was NOK 4.6 billion.

The Board of Directors propose to distribute NOK 3.0 per share as cash dividend, representing 60 percent of the 2025 adjusted net income. The proposal yields in total NOK 5.9 billion in shareholder distribution  for 2025 and is subject to approval by the Annual General Meeting on May 7, 2026.

Reliable access to renewable energy remains key to Hydro’s low-carbon aluminium strategy and competitiveness. Hydro signed two long-term power sourcing agreements with Hafslund in the fourth quarter. The agreements cover 5.25 TWh for the period of 2031 to 2040 in price area NO3, which is home to Hydro Sunndal and Hydro Høyanger smelters. Based on renewable energy, Hydro can produce aluminium in Norway with a carbon footprint about 75 percent less than the global average.

In addition to the external power souring, Hydro is investing in its hydropower portfolio. The NOK 1.2 billion Illvatn pumped storage plant project in Norway represents Hydro’s biggest investment in hydropower in more than 20 years. Illvatn will be part of Hydro’s power portfolio supplying renewable energy to aluminium production in Norway.

Hydro announced in November the decision to consolidate the Extrusions operations in Europe with a proposal to close five of its European plants. The closure of the two plants in the United Kingdom is confirmed, and are scheduled to close in late 2026. In the fourth quarter, the five plants were impaired by a total of NOK 398 million, and a provision of NOK 1,226 million was taken for the closure and redundancy cost. Both of these items are excluded from the adjusted EBITDA. An environmental provision of NOK 72 million impacted the adjusted EBITDA in the fourth quarter.

The strategic workforce reduction announced in August 2025 was completed in the fourth quarter. The total number of employees that have left or will leave the company within the first half of 2026 is around 850. The total redundancy cost taken in the third and fourth quarter was NOK 401 million, with no further cost expected in 2026. 

The capital expenditure guidance for the full year was reduced from NOK 15 billion to NOK 13.5 billion in the second quarter. The actual cash effective spend in 2025 ended at NOK 12.1 billion, strengthening the financial flexibility in the face of market unrest and uncertainty.

“Hydro’s relentless focus on operational excellence, cost competitiveness and adaptability has been key to sustaining strong performance in a challenging macro environment. Through dedicated efforts from our 32,000 people we continue to offer attractive shareholder returns, exemplified by the proposed distribution of NOK 3.0 per share for 2025,” says Kallevik.

Results and market development per business area

Adjusted EBITDA for Bauxite & Alumina decreased compared to the fourth quarter of last year, to NOK 1,392 million from NOK 4,969 million, mainly driven by lower alumina sales prices and stronger BRL to USD. This was partly offset by increased sales volumes and positive effects from replacing heavy fuel oil with natural gas in the alumina production. 

PAX traded down to USD 306 per mt at the end of the fourth quarter, from USD 321 at the end of the third quarter, driven by a falling Chinese alumina price and a loosening global alumina balance as alumina production at new refineries in Indonesia continued ramping up. China's alumina market was oversupplied, driving domestic prices down to marginal cash cost of production, however, no significant curtailments have been observed so far. Monthly Chinese bauxite imports from Guinea trended up seasonally in the fourth quarter, driving bauxite prices lower.

Adjusted EBITDA for Energy decreased in the fourth quarter compared to the same period last year, to NOK 1,075 million from NOK 1,151 million. The decrease was mainly due to lower price area gain and no recognition of Markbygden Ett termination compensation this year. This was partly offset by higher production and higher prices.

Average Nordic power prices in the fourth quarter of 2025 increased compared to both the previous quarter and the same quarter last year. The increase from the previous quarter was mainly driven by stronger seasonal demand, below normal wind power production and production outages, while the increase from the same quarter last year was a result of a weaker hydrology. Price area differences between the south and north of the Nordic market narrowed compared to both the previous quarter and the same period last year, in line with weaker hydrology in the northern areas.

Adjusted EBITDA for Aluminium Metal increased in the fourth quarter of 2025 compared to the fourth quarter of 2024, to NOK 3,707 million from NOK 1,949 million, mainly due to higher all-in metal prices and lower alumina cost, partly offset by weaker USD to NOK. Global primary aluminium consumption was higher in the quarter compared to the fourth quarter of 2024, driven by a 1.2 percent increase in world ex. China.​ The three month aluminium price has increased throughout the fourth quarter of 2025, starting at USD 2,688 per mt and ending at USD 2,995 per mt. ​ 

Adjusted EBITDA for Metal Markets decreased in the fourth quarter of 2025 compared to the same period last year, to a negative NOK 56 million from NOK 319 million, due to lower results from sourcing and trading activities, and negative inventory valuation and currency effects, partly offset by increased results from recyclers.

Adjusted EBITDA for Extrusions decreased in the fourth quarter of 2025 compared to the same quarter last year, to a loss of NOK 62 million from NOK 371 million, driven by weaker sales margins in combination with somewhat lower 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 fourth quarter of 2025 compared to the same quarter last year and increasing 3 percent compared to the third quarter. 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 been flat in the fourth quarter of 2025 compared to the same quarter last year, but decreasing 8 percent compared to the third quarter, partly driven by seasonality. Extrusion demand has continued to be very weak in the commercial transport segment driven by low trailer builds. Automotive demand has also been weak. Demand has been positive in the building & construction and industrial segments. At the same time, extrusions demand across segments is being subdued due to higher product prices on the back of higher tariffs and duties on aluminium in the U.S.

Other key financials

Compared to the third quarter of 2025, Hydro’s adjusted EBITDA decreased to NOK 5,587 million from NOK 5,996 million, mainly due to lower Extrusion and Recycling margins and volumes as well as increased fixed cost due to seasonality higher maintenance partly offset by higher realized aluminium price and higher upstream sales volumes.

Net income (loss) amounted to negative NOK 2,156 million in the fourth quarter of 2025. Net income (loss) included unrealized derivative losses, mainly on LME related contracts of NOK 2,594 million, rationalization charges and closure costs of NOK 1,493 million, impairment charges of NOK 721 million and transaction related gains of NOK 402 million. The tax effect on these adjustments reflected a standardized tax rate for taxable gains and tax deductible losses. Adjusted net income (loss) for the fourth quarter ended at NOK 1,673 million.

Hydro’s net debt decreased from NOK 13.6 billion to NOK 9.7 billion during the fourth quarter of 2025. The net debt decrease was mainly driven by EBITDA contribution and net operating capital release, partially offset by investments.

Adjusted net debt decreased from NOK 21.1 billion to NOK 18.2 billion, mainly driven by the decrease in net debt of NOK 3.9 billion, partially offset by increased adjustments of NOK 1.0 billion, mainly driven by increased hedging collateral and other liabilities.

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: 

Baard Erik Haugen

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[e-mail]

Elitsa Blessi

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Media contact: 

Halvor Molland 

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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 Q4 2025
• NHY Fourth Quarter Report 2025

Source: Norsk Hydro

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