Norsk Hydro Q2 sales beat estimates on higher prices
Norsk Hydro reported adjusted EBITDA of NOK 8,923 million for Q2 2026, driven by higher aluminium prices. Sales reached $5.983 billion, beating estimates, while adjusted EPS of $0.23 missed expectations. The company plans to restart Slovalco capacity in H2 2026.
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Norsk Hydro reported adjusted EBITDA of NOK 8,923 million for the second quarter of 2026, an increase from NOK 7,790 million in the same quarter last year. The growth was driven by higher aluminium prices and product premiums, alongside improved earnings in the recycling business. However, lower energy production due to hydrology and adverse effects from a stronger Norwegian krone negatively impacted the results. The company achieved strong profitability, with adjusted earnings per share rising to NOK 2.2 from NOK 1.7 in the second quarter of 2025. Free cash flow for the quarter was NOK 4 billion, and the twelve-month adjusted return on capital employed (RoaCE) ended at 10.9 percent.
President and CEO Eivind Kallevik highlighted the operational strength and market opportunities, noting that the agreement to restart Slovalco is a significant step for European aluminium capacity. The company announced the planned restart of 75,000 tonnes of capacity at the Slovalco smelter during the second half of 2026, following a long-term framework agreement with the Slovak government.
Operational Highlights
Hydro's upstream businesses demonstrated continued strong performance. Alunorte saw year-on-year productivity increases, while the ramp-up of previously curtailed capacity at Norwegian smelters contributed to higher production volumes. The recycling business delivered robust results, particularly in North America, with adjusted EBITDA exceeding NOK 900 million. Additionally, the company secured a further 5 TWh of power sourcing in the second quarter.
Business Area Performance
| Business Area | Adjusted EBITDA Q2 2026 (NOK million) | Adjusted EBITDA Q2 2025 (NOK million) |
|---|---|---|
| Bauxite & Alumina | 522 | 1,521 |
| Energy | 499 | 1,069 |
| Aluminium Metal | 6,421 | 2,423 |
| Metal Markets | 32 | 276 |
| Extrusions | 1,463 | 1,260 |
Adjusted EBITDA for Bauxite & Alumina decreased primarily due to lower alumina prices and a stronger Brazilian real. Energy results fell due to lower production and a loss on price area differences. Conversely, Aluminium Metal saw significant growth driven by higher all-in metal prices and lower alumina costs. Metal Markets declined due to lower trading results, while Extrusions improved on higher recycling margins.
Financial Position and Outlook
Net income for the quarter amounted to NOK 5,965 million, which included unrealized derivative gains of NOK 3,088 million and various impairment charges. Net debt increased from NOK 12.9 billion to NOK 16.3 billion, mainly due to dividends paid and investments. Hydro also entered a five-year supply agreement with Nexans for 85,000 tonnes of low-carbon aluminium wire rod and signed a 10-year power agreement with Eviny covering 0.5 TWh annually from 2031 to 2040.
The company reported quarterly sales of $5.983 billion, beating the analyst consensus estimate of $5.380 billion by 11.21 percent. This represents a 14.62 percent increase over sales of $5.220 billion in the same period last year. Adjusted earnings per share were $0.23, missing the analyst consensus estimate of $0.25 by 8 percent. This is a 43.75 percent increase over earnings of $0.16 per share from the same period last year.
How will the restart of Slovalco impact European aluminium supply dynamics and regional pricing power?
What is the expected timeline for normalizing energy production levels given current hydrology challenges?
Will the significant rise in net debt constrain Hydro's ability to maintain dividend levels or pursue further M&A?
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