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1. Company Snapshot

1.a. Company Description

Norsk Hydro ASA engages in the power production, bauxite extraction, alumina refining, aluminium smelting, remelting, and recycling activities; and provision of extruded solutions worldwide.It operates through Bauxite & Alumina, Aluminium Metal, Metal Markets, Extrusions, and Energy segments.The Bauxite & Alumina segment engages in bauxite mining activities, production of alumina, and related commercial activities, primarily the sale of alumina.


The Aluminium Metal segment is involved in the primary aluminum production casting activities.This segment principally offers extrusion ingots, foundry alloys, and sheet and standard ingots.The Metal Markets segment sells products from the company's primary metal plants; operates recyclers; and trades in physical and financial metals.


The Extrusions segment offers extrusion profiles, building systems, and precision tubing products for construction, automotive and heating, and ventilation and air conditioning sectors, as well as operates recycling facilities.The Energy segment engages in the trading and wholesale business in Brazil; energy sourcing operations; and operation of power stations in Norway, as well as renewable energy production, such as wind and solar, battery, and hydrogen.Norsk Hydro ASA was founded in 1905 and is headquartered in Oslo, Norway.

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1.b. Last Insights on NHY

Breaking News: Norsk Hydro ASA reported Q4 2025 earnings with adjusted EBITDA of NOK 5,587 million, down from NOK 7,701 million in Q4 2024, due to lower alumina prices and a stronger NOK. Despite revenue decline, the company focuses on operational efficiency and strategic investments. Hydro generated NOK 4.6 billion in free cash flow and achieved a 10.2% adjusted RoaCE for 2025. The company is well-positioned to play a key role in the green transition with its low-carbon aluminium. Analysts are evaluating if the current share price offers value.

1.c. Company Highlights

2. Norsk Hydro's Q4 2025 Earnings: A Mixed Bag

Norsk Hydro reported revenues of NOK 47 billion for Q4, a decline of around 14% driven by lower alumina prices. Adjusted EBITDA was NOK 5.6 billion, and adjusted net income was NOK 1.7 billion, with adjusted EPS at NOK 0.7 per share. However, actual EPS came out at NOK 0.75, below estimates of NOK 1.55. The company's adjusted EBITDA margin was around 12%, indicating a relatively stable performance despite challenging market conditions.

Publication Date: Feb -16

📋 Highlights
  • Financial Performance :: Q4 EBITDA of NOK 5.6 billion, free cash flow of NOK 4.6 billion, and adjusted RoaCE of 10.2% (exceeding 10% target).
  • Production Growth :: Alumina production above capacity, smelter output up 2.5%, and power production rising 13.6% year-over-year.
  • Cost & Restructuring :: Strategic workforce reduction saving NOK 1 billion annually from 2026 and closure of five European extrusion plants.
  • Energy Strategy :: Secured 5.25 TWh in long-term power contracts with Hafslund (2031–2040) and invested in a Norwegian power plant.
  • Dividend Proposal :: NOK 3 per share dividend (60% of adjusted net income) and total shareholder distribution of NOK 5.9 billion.

Operational Highlights

The company's operational performance was a highlight, with alumina production above nameplate capacity, a 2.5% increase in smelter production, and a 13.6% year-over-year increase in power production. The Alunorte refinery experienced improved flow and high equipment availability, contributing to the positive operational performance. As Trond Christophersen noted, "Adjusted EBITDA increased due to higher equipment availability and improved refinery flow in Alumina."

Segment Performance

Aluminum Metal delivered stable performance, with primary aluminum production increasing 2.5% year-over-year. Adjusted EBITDA rose to NOK 3.7 billion, driven by higher all-in metal prices and reduced alumina costs. However, Metal Markets' adjusted EBITDA decreased due to lower sourcing and trading results and negative currency effects. Extrusions' adjusted EBITDA also decreased year-over-year due to lower margins and sales volumes.

Valuation and Outlook

With a P/E Ratio of 15.34 and an EV/EBITDA of 5.95, Norsk Hydro's valuation appears reasonable. The company's dividend yield of 2.62% is also attractive. Analysts estimate next year's revenue growth at 4.2%. Given the company's commitment to its 2030 strategy, focusing on health and safety, cost control, and growth areas such as recycling, extrusions, and renewable energy, Norsk Hydro is well-positioned for long-term success.

Cost Control and Future Prospects

Norsk Hydro has implemented cost control measures, including a strategic workforce reduction, which yielded savings of roughly NOK 1 billion per year starting in 2026. The company has also secured two new long-term power contracts and invested in a power plant in Norway. For Q1, 70% of primary production is booked at USD 2,803 per tonne, with expected realized premiums in the range of USD 380-430 per tonne.

3. NewsRoom

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Is Norsk Hydro (OB:NHY) Still Attractively Priced After Strong Five Year Share Gains?

Feb -15

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Norsk Hydro ASA (NHYDY) Q4 2025 Earnings Call Highlights: Navigating Market Challenges with ...

Feb -13

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Norsk Hydro: Integrated Annual Report 2025: Increasing resilience to reach 2030 ambitions

Feb -13

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Norsk Hydro: Solid upstream performance driving strong cash flow generation

Feb -13

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How New Price Targets Are Shaping The Story For Norsk Hydro (OB:NHY)

Jan -23

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Assessing Norsk Hydro (OB:NHY) Valuation After Recent Share Price Momentum

Jan -23

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Norsk Hydro: Invitation to Hydro's fourth quarter results 2025

Jan -16

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Australia, NSW plan to secure Tomago Aluminium smelter beyond 2028

Dec -12

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.08%)

6. Segments

Hydro Extrusions

Expected Growth: 2.5%

Hydro Extrusions' 2.5% growth driven by increasing demand for lightweight aluminum products in the automotive and construction industries, coupled with Norsk Hydro ASA's strategic expansion into emerging markets and continuous improvement in operational efficiency.

Hydro Metal Markets

Expected Growth: 1.8%

Norsk Hydro ASA's Hydro Metal Markets segment growth of 1.8% is driven by increasing demand for aluminum products in the automotive and construction industries, coupled with rising prices and improved production efficiency. Additionally, the company's focus on recycling and sustainability initiatives contributes to the growth, as customers prioritize environmentally friendly products.

Hydro Bauxite and Alumina

Expected Growth: 1.2%

Hydro Bauxite and Alumina's 1.2% growth driven by increasing demand for aluminum in electric vehicles, renewable energy infrastructure, and construction. Rising prices of alumina, a key input in aluminum production, also contribute to growth. Additionally, Norsk Hydro ASA's focus on cost reduction, operational efficiency, and strategic partnerships support the segment's expansion.

Hydro Aluminium Metal

Expected Growth: 2.2%

Norsk Hydro ASA's Hydro Aluminium Metal segment growth of 2.2% is driven by increasing demand for lightweight materials in the automotive and aerospace industries, coupled with growing adoption of renewable energy sources. Additionally, the company's focus on recycling and sustainability initiatives, as well as its cost-cutting measures, contribute to the segment's growth.

Hydro Energy

Expected Growth: 3.0%

Norsk Hydro ASA's 3.0% growth in Hydro Energy is driven by increasing global demand for renewable energy, favorable government policies and regulations, and the company's strategic expansion into new markets. Additionally, advancements in hydroelectric power technology and declining production costs contribute to the segment's growth.

Other and Eliminations

Expected Growth: 1.5%

Norsk Hydro ASA's Other and Eliminations segment growth of 1.5% is driven by increased energy sales, higher volumes from the company's aluminum portfolio, and a favorable currency impact. Additionally, the segment benefits from the company's ongoing efforts to optimize its operations and reduce costs, leading to improved profitability.

7. Detailed Products

Primary Aluminium

Norsk Hydro ASA produces high-quality primary aluminium, which is used in various industries such as transportation, construction, and consumer goods.

Aluminium Extrusions

Norsk Hydro ASA offers a range of aluminium extrusions, including profiles, tubes, and rods, used in various applications such as construction, transportation, and consumer goods.

Rolled Products

Norsk Hydro ASA produces rolled aluminium products, including sheets, plates, and coils, used in various industries such as packaging, transportation, and construction.

Recycled Aluminium

Norsk Hydro ASA offers recycled aluminium products, which reduce the environmental impact of aluminium production and support sustainable development.

Bauxite and Alumina

Norsk Hydro ASA extracts and processes bauxite, a raw material used in the production of alumina, which is then used to produce primary aluminium.

Energy

Norsk Hydro ASA generates renewable energy through its hydropower plants, which power its aluminium production and supply excess energy to the grid.

8. Norsk Hydro ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

Norsk Hydro ASA operates in the aluminum and energy industry, where substitutes are limited. However, the increasing demand for sustainable and eco-friendly products may lead to the development of new substitutes, posing a moderate threat to the company.

Bargaining Power Of Customers

Norsk Hydro ASA's customers are primarily industrial companies and manufacturers, who have limited bargaining power due to the company's strong market position and diversified customer base.

Bargaining Power Of Suppliers

Norsk Hydro ASA relies on a few large suppliers for raw materials, giving them some bargaining power. However, the company's strong relationships with suppliers and its ability to negotiate prices mitigate this threat.

Threat Of New Entrants

The aluminum and energy industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to pose a significant threat to Norsk Hydro ASA.

Intensity Of Rivalry

The aluminum and energy industry is highly competitive, with several large players competing for market share. Norsk Hydro ASA faces intense rivalry from companies like Rio Tinto, Alcoa, and Rusal, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.54%
Debt Cost 10.44%
Equity Weight 76.46%
Equity Cost 10.44%
WACC 10.44%
Leverage 30.79%

11. Quality Control: Norsk Hydro ASA passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Grupa Kety

A-Score: 7.0/10

Value: 4.5

Growth: 6.1

Quality: 6.6

Yield: 9.4

Momentum: 8.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Titan Cement

A-Score: 6.6/10

Value: 5.5

Growth: 8.2

Quality: 6.2

Yield: 6.9

Momentum: 6.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Navigator

A-Score: 6.2/10

Value: 6.0

Growth: 4.8

Quality: 5.7

Yield: 10.0

Momentum: 1.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
SSAB

A-Score: 6.2/10

Value: 7.8

Growth: 5.8

Quality: 4.5

Yield: 8.1

Momentum: 7.5

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Norsk Hydro

A-Score: 6.2/10

Value: 6.5

Growth: 6.3

Quality: 5.6

Yield: 6.2

Momentum: 5.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Constellium

A-Score: 3.3/10

Value: 6.7

Growth: 2.9

Quality: 2.4

Yield: 0.0

Momentum: 6.5

Volatility: 1.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

82.44$

Current Price

82.44$

Potential

-0.00%

Expected Cash-Flows