Commitment to Low-Carbon Aluminum Production
At its Capital Markets Day 2023, Norsk Hydro outlined its strategy to meet the increasing demand for low-carbon aluminum. By 2030, the company aims to enhance its recycling efforts, boost the production of extruded products, and intensify its renewable energy focus. This initiative aligns with Hydro's goal of facilitating an equitable and nature-positive transition, while also expanding the market for environmentally-friendly aluminum.
Projected Financial and Operational Growth
Norsk Hydro anticipates a significant rise in earnings from greener operations, potentially increasing by up to NOK 2 billion (approximately $188 million) by 2030. The company expects its Extrusions segment to achieve an EBITDA between NOK 10-12 billion (approximately $940 million - $1.13 billion) in 2023. Recycling operations are set to grow substantially, targeting an EBITDA of NOK 5-8 billion (approximately $470 million - $752 million) by 2030, with a goal to recycle 850,000-1,200,000 tons of aluminum scrap. Despite changes in its portfolio, Hydro is committed to reducing CO2 emissions by 30% by 2030 and is focusing on biodiversity, waste management, and responsible land use.
Investment Strategy and Expansion
The company has revised its investment target for 2024 and beyond to NOK 15 billion (approximately $1.41 billion) annually, considering inflation and carryover from 2023. Hydro also plans a yearly flexibility in investment of NOK 1-2 billion (approximately $94 million - $188 million) and aims to release net working capital of NOK 2 billion (approximately $188 million) in 2024. For 2023, the company is targeting a distribution of 50-60% of its adjusted profit after tax to shareholders.
