Hydro recently released its financial report for the first quarter of 2025, revealing remarkable growth in its performance. During the quarter, the company’s revenue increased by 20% year-on-year to NOK 57.094 billion, while adjusted EBITDA surged by 76% to NOK 9.516 billion. Notably, net profit skyrocketed from NOK 428 million in the same period last year to NOK 5.861 billion, representing a year-on-year increase of over 1200% and hitting a new single-quarter profit high in recent years.

Two core drivers fueled this growth

1. Rising commodity prices:

Global alumina and aluminum prices continued their upward trend in Q1, driven by sustained demand for aluminum from the new energy industry—such as electric vehicles and energy storage systems and temporary adjustments to alumina production capacity in some regions. For example, the average price of aluminum on the London Metal Exchange (LME) in Q1 2025 rose by approximately 18% compared to the same period last year, directly boosting the company’s revenue and gross profit.

2. Favorable currency dynamics:

The Norwegian krone depreciated by about 5% against major currencies like the U.S. dollar and euro in Q1, generating exchange gains when converting overseas revenue into local currency. With more than 40% of its revenue coming from the South American and North American markets, currency factors contributed approximately NOK 800 million to EBITDA.

Challenges and risks persist

Despite the strong performance, Hydro faces cost-side pressures:

- Fluctuating energy prices caused raw material costs (such as electricity and alumina feedstock) to rise by 12% year-on-year, squeezing underlying profit margins.

- In Europe, the extrusion materials business saw a 9% year-on-year decline in production due to weak demand in the construction sector, with profit margins dropping from 15% in the prior year to 11%.

- Alumina sales fell by 6% year-on-year due to customer inventory adjustments, partially offsetting the benefits of price increases.

- Fixed costs (such as equipment maintenance and R&D investments) rose by NOK 500 million due to inflation.

Looking ahead, Hydro plans to continue optimizing its production capacity layout and accelerate the commissioning of its green aluminum projects in Norway to meet global low-carbon transformation needs. The company expects aluminum prices to remain high in Q2 but warns of potential demand pullbacks due to a slowing macroeconomy.