Hydro demands Russian contracts to be dropped. Compensation claims can also be received, says Hilda Merritt Achim, Hydro CEO.
Norsk Hydro set records in the first quarter, with adjusted operating profit (EBITDA) of NOK 11.2 billion, compared to NOK 5.2 billion a year earlier.
Raw material costs are increasing, but Hydro is still providing preliminary numbers due to higher aluminum prices.
At the same time, there is uncertainty in global markets, including the Russian invasion of Ukraine, high inflation, and China’s epidemic problems.
– What we’re seeing is the result of a very tight market, which is partly due to the energy shock we actually experienced before the war. This led to a capacity shutdown and an increase in the price of input factors, Aasheim tells E24.
– With the outbreak of the Corona virus in China, which is in some way destroying value chains, there are many who are talking about moving towards a recession, because inflation is rising more and more, and we must correct. War also contributes to the lack of value chains. She says we are taking this with us and we are aware of it.
Hydro’s response to the uncertainty is to continue to lower costs and strengthen its focus on new green products. The company is building new plants and acquiring a Polish player to increase investment in aluminum recycling, which has a lower cost than new aluminum.
We are working to make the company strong all the time. “We know this industry is cyclical,” Achim says.
Stronger than Norsk Hydro in the first quarter
She still has Russian contracts
Hydro still has Russian contracts entered into by the company’s dealers prior to the Russian invasion of Ukraine. E24 recently reported that the ship “Silver Dania” came with 4,000 tons of Russian aluminum on board from St. Petersburg to Karmoy.
The company’s obligations apply primarily to the current year, and Hydro is working to reduce them further.
– The difficult thing is that as long as these are not punished, getting out of them is very expensive. Not only the direct cost, but compensation claims can also be obtained which can be prohibitive. That’s why we’re working to end this phase in a good way, says Achim.
– What we have mostly are loads with standard ingots (aluminum bars, flint.), which have moved to our property and are located in Rotterdam. Hydro manager says: We exchanged cold metal and some lining materials with Russia, and we also sold alumina.
Are there more ships on the way?
– There is some material coming from this Rotterdam warehouse that has already passed on to our property. There we have a dialogue with business and store officials to explain what this is. Because our goal is to stop the activity with the Russian partners we’ve previously worked with, Ashim says.
4,000 tons of Russian aluminum en route to Hydro in Karmøy
Norsk Hydro has about 400 Ukrainian employees in its Poland operations. The company helped those who want to bring their families to Poland, and organized transportation to and from the border with Ukraine.
– They worked in our Polish press. It is touching to see, they have moved between Poland and Ukraine. When war broke out, help our people, says Achim.
– They stood at the border and waited for the families, wives and children, who crossed the border, and took them to where we have our business, and where we set up houses and schools and helped them as much as we could, she said.
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