Norsk Hydro: Solid upstream performance driving strong cash flow generation

13 Feb 2026 07:00 CET

Hydro's adjusted EBITDA for the fourth quarter of 2025 was NOK 5,587 million,
down from NOK 7,701 million in the same quarter last year. The results decreased
from lower realized alumina prices and a stronger NOK. This was partly offset by
higher primary and alumina volumes and lower raw material costs. Hydro generated
NOK 4.6 billion in free cash flow, while the twelve month adjusted RoaCE ended
at 10.2 percent.

* Alunorte alumina production above nameplate capacity, aluminium smelter
production up 2.5 percent year on year

* Securing power for the Norwegian smelter system with two long-term power
contracts and power plant investment

* Strategic workforce reduction completed and Extrusion Europe restructuring
progressing according to plan

* Proposed dividend of NOK 3.0 per share

"Strong aluminium metal prices continued to provide tailwinds in the fourth
quarter, driving near-record earnings in our primary aluminium business and
offsetting weak downstream markets. This highlights the robustness of Hydro's
financial position and diversified portfolio," says Eivind Kallevik, President
and CEO of Hydro.

The fourth quarter saw strong operational performance in the upstream segments.
Alumina production at Alunorte exceeded nameplate capacity supported by improved
refinery flow and high equipment availability. In Aluminium Metal the ramp up of
the previously curtailed capacity at the Norwegian smelters continues and the
quarterly production increased by 2.5 percent year on year.

EBITDA for the quarter ended at NOK 5,587 million. Despite seasonally higher
investments in the fourth quarter, the free cash flow was NOK 4.6 billion.

The Board of Directors propose to distribute NOK 3.0 per share as cash dividend,
representing 60 percent of the 2025 adjusted net income. The proposal yields in
total NOK 5.9 billion in shareholder distribution  for 2025 and is subject to
approval by the Annual General Meeting on May 7, 2026.

Reliable access to renewable energy remains key to Hydro's low-carbon aluminium
strategy and competitiveness. Hydro signed two long-term power sourcing
agreements with Hafslund in the fourth quarter. The agreements cover 5.25 TWh
for the period of 2031 to 2040 in price area NO3, which is home to Hydro Sunndal
and Hydro Høyanger smelters. Based on renewable energy, Hydro can produce
aluminium in Norway with a carbon footprint about 75 percent less than the
global average.

In addition to the external power souring, Hydro is investing in its hydropower
portfolio. The NOK 1.2 billion Illvatn pumped storage plant project in Norway
represents Hydro's biggest investment in hydropower in more than 20 years.
Illvatn will be part of Hydro's power portfolio supplying renewable energy to
aluminium production in Norway.

Hydro announced in November the decision to consolidate the Extrusions
operations in Europe with a proposal to close five of its European plants. The
closure of the two plants in the United Kingdom is confirmed, and are scheduled
to close in late 2026. In the fourth quarter, the five plants were impaired by a
total of NOK 398 million, and a provision of NOK 1,226 million was taken for the
closure and redundancy cost. Both of these items are excluded from the adjusted
EBITDA. An environmental provision of NOK 72 million impacted the adjusted
EBITDA in the fourth quarter.

The strategic workforce reduction announced in August 2025 was completed in the
fourth quarter. The total number of employees that have left or will leave the
company within the first half of 2026 is around 850. The total redundancy cost
taken in the third and fourth quarter was NOK 401 million, with no further cost
expected in 2026.

The capital expenditure guidance for the full year was reduced from NOK 15
billion to NOK 13.5 billion in the second quarter. The actual cash effective
spend in 2025 ended at NOK 12.1 billion, strengthening the financial flexibility
in the face of market unrest and uncertainty.

"Hydro's relentless focus on operational excellence, cost competitiveness and
adaptability has been key to sustaining strong performance in a challenging
macro environment. Through dedicated efforts from our 32,000 people we continue
to offer attractive shareholder returns, exemplified by the proposed
distribution of NOK 3.0 per share for 2025," says Kallevik.


Results and market development per business area

Adjusted EBITDA for Bauxite & Alumina decreased compared to the fourth quarter
of last year, to NOK 1,392 million from NOK 4,969 million, mainly driven by
lower alumina sales prices and stronger BRL to USD. This was partly offset by
increased sales volumes and positive effects from replacing heavy fuel oil with
natural gas in the alumina production.

PAX traded down to USD 306 per mt at the end of the fourth quarter, from USD
321 at the end of the third quarter, driven by a falling Chinese alumina price
and a loosening global alumina balance as alumina production at new refineries
in Indonesia continued ramping up. China's alumina market was oversupplied,
driving domestic prices down to marginal cash cost of production, however, no
significant curtailments have been observed so far. Monthly Chinese bauxite
imports from Guinea trended up seasonally in the fourth quarter, driving bauxite
prices lower.

Adjusted EBITDA for Energy decreased in the fourth quarter compared to the same
period last year, to NOK 1,075 million from NOK 1,151 million. The decrease was
mainly due to lower price area gain and no recognition of Markbygden Ett
termination compensation this year. This was partly offset by higher production
and higher prices.

Average Nordic power prices in the fourth quarter of 2025 increased compared to
both the previous quarter and the same quarter last year. The increase from the
previous quarter was mainly driven by stronger seasonal demand, below normal
wind power production and production outages, while the increase from the same
quarter last year was a result of a weaker hydrology. Price area differences
between the south and north of the Nordic market narrowed compared to both the
previous quarter and the same period last year, in line with weaker hydrology in
the northern areas.

Adjusted EBITDA for Aluminium Metal increased in the fourth quarter of 2025
compared to the fourth quarter of 2024, to NOK 3,707 million from NOK 1,949
million, mainly due to higher all-in metal prices and lower alumina cost, partly
offset by weaker USD to NOK. Global primary aluminium consumption was higher in
the quarter compared to the fourth quarter of 2024, driven by a 1.2 percent
increase in world ex. China.? The three month aluminium price has increased
throughout the fourth quarter of 2025, starting at USD 2,688 per mt and ending
at USD 2,995 per mt. ?

Adjusted EBITDA for Metal Markets decreased in the fourth quarter of 2025
compared to the same period last year, to a negative NOK 56 million from NOK
319 million, due to lower results from sourcing and trading activities, and
negative inventory valuation and currency effects, partly offset by increased
results from recyclers.

Adjusted EBITDA for Extrusions decreased in the fourth quarter of 2025 compared
to the same quarter last year, to a loss of NOK 62 million from NOK 371 million,
driven by weaker sales margins in combination with somewhat lower volumes.
Increasing U.S. Midwest premium (positive metal effect) compensated for
pressured sales margins.

European extrusion demand is estimated to have been flat in the fourth quarter
of 2025 compared to the same quarter last year and increasing 3 percent compared
to the third quarter. Demand for building & construction and industrial segments
have stabilized at historically low levels with some improvements in order
bookings. Automotive demand has been negatively impacted by lower European light
vehicle production, partly offset by increased production of electric vehicles.

North American extrusion demand is estimated to have been flat in the fourth
quarter of 2025 compared to the same quarter last year, but decreasing 8 percent
compared to the third quarter, partly driven by seasonality. Extrusion demand
has continued to be very weak in the commercial transport segment driven by low
trailer builds. Automotive demand has also been weak. Demand has been positive
in the building & construction and industrial segments. At the same time,
extrusions demand across segments is being subdued due to higher product prices
on the back of higher tariffs and duties on aluminium in the U.S.


Other key financials

Compared to the third quarter of 2025, Hydro's adjusted EBITDA decreased to NOK
5,587 million from NOK 5,996 million, mainly due to lower Extrusion and
Recycling margins and volumes as well as increased fixed cost due to seasonality
higher maintenance partly offset by higher realized aluminium price and higher
upstream sales volumes.

Net income (loss) amounted to negative NOK 2,156 million in the fourth quarter
of 2025. Net income (loss) included unrealized derivative losses, mainly on LME
related contracts of NOK 2,594 million, rationalization charges and closure
costs of NOK 1,493 million, impairment charges of NOK 721 million and
transaction related gains of NOK 402 million. The tax effect on these
adjustments reflected a standardized tax rate for taxable gains and tax
deductible losses. Adjusted net income (loss) for the fourth quarter ended at
NOK 1,673 million.

Hydro's net debt decreased from NOK 13.6 billion to NOK 9.7 billion during the
fourth quarter of 2025. The net debt decrease was mainly driven by EBITDA
contribution and net operating capital release, partially offset by investments.

Adjusted net debt decreased from NOK 21.1 billion to NOK 18.2 billion, mainly
driven by the decrease in net debt of NOK 3.9 billion, partially offset by
increased adjustments of NOK 1.0 billion, mainly driven by increased hedging
collateral and other liabilities.

Reported earnings before financial items and tax (EBIT), and net income include
effects that are disclosed in the quarterly report. Adjustments to EBITDA, EBIT,
and net income (loss) are defined and described as part of the alternative
performance measures (APM) section in the quarterly report.


Investor contact:

Baard Erik Haugen

+47 92497191

Erik.Haugen@hydro.com

Elitsa Blessi

+47 91775472

Elitsa.Blessi@hydro.com


Media contact:

Halvor Molland

+47 92979797

Halvor.Molland@hydro.com


The information was submitted for publication from Hydro Investor Relations and
the contact persons set out above. Certain statements included in this
announcement contain forward-looking information, including, without limitation,
information relating to (a) forecasts, projections and estimates, (b) statements
of Hydro management concerning plans, objectives and strategies, such as planned
expansions, investments, divestments, curtailments or other projects, (c)
targeted production volumes and costs, capacities or rates, start-up costs, cost
reductions and profit objectives, (d) various expectations about future
developments in Hydro's markets, particularly prices, supply and demand and
competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk
management, and (i) qualified statements such as "expected", "scheduled",
"targeted", "planned", "proposed", "intended" or similar. Although we believe
that the expectations reflected in such forward-looking statements are
reasonable, these forward-looking statements are based on a number of
assumptions and forecasts that, by their nature, involve risk and uncertainty.

Various factors could cause our actual results to differ materially from those
projected in a forward-looking statement or affect the extent to which a
particular projection is realized. Factors that could cause these differences
include, but are not limited to: our continued ability to reposition and
restructure our upstream and downstream businesses; changes in availability and
cost of energy and raw materials; global supply and demand for aluminium and
aluminium products; world economic growth, including rates of inflation and
industrial production; changes in the relative value of currencies and the value
of commodity contracts; trends in Hydro's key markets and competition; and
legislative, regulatory and political factors. No assurance can be given that
such expectations will prove to have been correct. Except where required by law,
Hydro disclaims any obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to Section 5-12 the Norwegian Securities Trading Act.

More information:
Access the news on Oslo Bors NewsWeb site

665755_NHY Fourth Quarter Report 2025.pdf
665755_NHY presentation Q4 2025.pdf