Norsk Hydro Q3 core profit misses forecasts as higher metal prices tie up cash

what happened

Norsk Hydro, a Norway-based aluminium maker, reported on Friday that its third-quarter core profit fell short of analyst forecasts, according to Reuters. Adjusted EBITDA rose 51.6% year on year to 9.09 billion crowns ($974.3 million), but that was under the 9.53 billion crown average from a company-compiled analyst poll. Higher metal prices lifted the company's working capital needs and advance payments.

Supply disruptions in the Gulf region have pushed up the premiums European buyers pay for metal, while growing alumina output in China and Indonesia has pressured prices of the raw material used to produce aluminium. Hydro is bringing smelting capacity back online in Slovakia and investing in Norwegian output aimed at Europe's power grid needs, as the region looks for steadier sources of supply.

Problems with gas deliveries to its Brazilian refinery and a disagreement over sales from its Qatar joint venture, however, pointed to weak spots in the company's own operations. The exchange rate used was $1 = 9.3302 Norwegian crowns.

why it matters

For aluminium markets, the report suggests that elevated premiums support European producers, yet rising costs and cash needs can squeeze near-term earnings and free cash flow. Investors in metals companies may watch whether Hydro's operational issues persist.

market impact

Aluminium: higher European premiums support producers, while Hydro's profit miss highlights cost and cash pressures in the sector.

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