Norwegian aluminium and renewable energy company Norsk Hydro has released its Q3 results, revealing a smaller-than-expected drop in earnings due to increased production in Brazil.
The firm’s underlying earnings before financial items and tax was NOK 1,366 million (€133.7 million) in Q3, down from NOK 2,676 million (€262 million) in the same period last year. This was due to a decrease in aluminium prices, partially offset by lower raw material costs and increased production in Brazil.
Analysis by Reuters suggests that the momentum for primary aluminium demand has weakened in 2019, and so Hydro expected global demand growth to sit at around 0%. Reuters also said the ongoing US-China trade war has shaken up commodities markets, forcing primary aluminium prices down. The news agency suggests that growth in China’s demand for primary aluminium is expected to slow to 1-2% in 2019, down from 4.1% in 2018, and 8% in 2017.
Operational issues in Brazil had been affecting Hydro, however, its Alunorte alumina refinery, which had been hit by production embargo following a spill in February 2018, has had the embargo lifted by a federal court and is now increasing production.
Norsk Hydro’s president and CEO, Hilde Merete Aasheim, said: “It is encouraging to see costs coming down in our upstream business, combined with forceful restructuring and optimisation measures downstream.
“Amid challenging markets, it is more important than ever to focus our efforts on what we control ourselves. I am therefore pleased to report progress on our new ambitious improvement programs, which is an important enabler for our profitability and sustainability agenda.”
Although the overall report is positive, a major cyberattack on Hydro on 19 March affected the organisation. Extruded aluminium profiles manufacturer, Extruded Solutions, owned by Norsk Hydro, suffered significantly. According to the firm, the financial impact of the cyberattack is estimated to be around NOK 550-650 million (€53.8-62.6 million) in the first half of 2019; however, there has been little impact on Q3.
Image: Norsk Hydro ASA