Aluminum company Norsk Hydro proposed an extra dividend and proposed share buybacks as it reported quarterly earnings that met expectations, sending the stock up 4.6%, despite warning of uncertainty amid threats to supply gas with a tariff in Europe.
Adjusted EBITDA rose to 11.6 billion kroner ($1.16 billion) in the April-June period from 6.6 billion kroner a year ago.
Estimates were for 11.6 billion crowns.
Norsk Hydro benefited from higher aluminum and alumina prices, boosted by currency effects, and reported higher margins in its extruded products division, although higher raw material costs offset some of those gains.
Hydro will propose an additional dividend of 3 billion kroner, or 1.45 kroner per share in addition to the paid dividend of 5.4 kroner per share in 2021, and the share buyback of 2 billion kroner over the next 12 months.
However, the company warned of “market uncertainty” with increased energy prices and a softening of the market for aluminum products.
“Since the invasion of Ukraine, we are seeing a new reality and changes are happening faster than before,” the financial director said.
To cope, it said it would continue its cost-cutting program, focus on producing aluminum with a lower carbon footprint and expand its work on renewable energy production.
“Several of Norsk Hydro’s facilities in Europe depend on gas for fuel, particularly its extrusion smelters and aluminum recycling plants,” the chief financial officer told Reuters.
Source: Capital
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