Key Takeaways:
Norsk Hydro reported Q2 adjusted EBITDA of NOK 8,923 million, up 15% from a year earlier on higher aluminium prices and recycling margins.
"This quarter reflects both Hydro's operational strength and the opportunities for European industry," Eivind Kallevik, President and CEO of Hydro, said. "The agreement on a framework to restart Slovalco is an important step toward rebuilding European aluminium capacity."
Adjusted earnings per share rose to NOK 2.2 from NOK 1.7, while free cash flow reached NOK 4 billion. The twelve-month adjusted RoaCE ended at 10.9%. Aluminium Metal, the largest segment, saw adjusted EBITDA more than double to NOK 6,421 million from NOK 2,423 million, benefiting from higher all-in metal prices and lower alumina costs. Recycling delivered over NOK 900 million in adjusted EBITDA, supported by strong North American margins and robust value-added product premiums.
The results show Hydro's ability to capture value from supportive aluminium markets while advancing strategic projects. The company plans to restart 75,000 tonnes of capacity at its Slovalco smelter in Slovakia during the second half of 2026, following a long-term framework agreement with the government on energy and carbon cost compensation.
Segment performance was mixed across the portfolio. Bauxite & Alumina adjusted EBITDA fell to NOK 522 million from NOK 1,521 million, hurt by lower alumina prices and a stronger Brazilian real against the dollar. Energy adjusted EBITDA declined to NOK 499 million from NOK 1,069 million on lower hydropower production and losses on price area differences. Metal Markets dropped to NOK 32 million from NOK 276 million on weaker sourcing and trading results. Extrusions bucked the trend, rising to NOK 1,463 million from NOK 1,260 million on higher recycling margins and lower fixed costs.
Hydro also secured two long-term agreements during the quarter. The company signed a 10-year power contract with Eviny covering 0.5 TWh annually from 2031 to 2040, lifting its covered Norwegian power sourcing needs to 85% in the 2030s. Separately, Hydro entered a five-year supply agreement with Nexans for about 85,000 tonnes of low-carbon aluminium wire rod, supporting European electricity infrastructure demand.
Net debt increased to NOK 16.3 billion from NOK 12.9 billion in the prior quarter, mainly due to dividends paid and investments. Adjusted net debt rose to NOK 22.8 billion from NOK 21.6 billion.
The guidance raise from the Slovalco restart and new power contracts signals management expects European aluminium demand to strengthen. Investors will watch the pace of the smelter ramp-up and further power sourcing announcements in the second half of 2026.
This article is for informational purposes only and does not constitute investment advice.
