Norwegian aluminum producer, Norsk Hydro advised that COVID-19 has negatively impacted global demand for metal consumption in construction, packaging and transportation, due to lockdowns that have cut economic activity short.
The company’s aluminum extrusion finishing business is currently running at about 60pc of typical output capacity and some remelting capacity has been curtailed at its Husnes plant.
Looking forward the company estimates it is behind on its full year 2020 targets due to COVID-19 and resulting demand decline, though improvement targets for 2023 remain unchanged.
However, the Oslo-headquartered aluminum maker’s operating profits increased in Q1 2020, supported by cost reductions, a production boost at its Alunorte refinery, and weaker local currency. These factors produced positive effects and were partly offset by reduced alumina and aluminum achieved prices.
Hydro’s alumina production increased by 90pc to 1.53mn mt in Q1 2020 from 805,000mt in the same quarter last year by 7pc from 1.43mn mt produced in Q4 2019.
The company’s alumina sourcing declined by 7pc to 664,000mt in Q1 2020, from 711,000mt sourced in Q1 2019 and was down 14pc from 769,000mt sourced in Q4 2019.
Aluminum sales reached 2.14mn mt in Q1 2020, a 50pc increase from 1.42mn mt sold in Q1 2019 and a 1pc decrease from 2.16mn mt sold in Q4 2019.
Hydro’s revenue rose 1pc to 38.12bn kroner ($3.68bn) in Q1 2020 from 37.58bn kroner in Q1 2019 and up 7pc from 35.49bn kroner in Q4 2019. The company’s EBIT increased to 2.3bn kroner from 20mn kroner during Q1 2019 while underlying EBIT rose to 2.25bn kroner in Q1 2020 from 559mn kroner during the same quarter last year.
Hydro’s underlying net income was 1.15mn kroner in Q1 2020, compared to 124mn kroner in Q1 2019 and versus a net income loss of 303mn reported in Q4 2019. Hydro’s Q1 2020 net loss was 2.03bn Kroner, compared to a net loss of 124mn kroner in Q1 2019.
($1= 10.34 kroner)