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Investing.com -- Norsk Hydro (OL:NHY) (OTC:NHYDY) reported a jump in first-quarter core profit on Tuesday, driven by higher aluminium prices and favorable currency movements, though the result came in slightly below market expectations.
At the same time, the company lowered its earnings forecast for its extrusion unit, citing softer demand in downstream markets.
Adjusted EBITDA for the quarter rose to 9.52 billion Norwegian crowns ($918 million), up from 5.41 billion crowns a year earlier. However, this was just below the 9.86 billion crowns anticipated by analysts in a company-provided consensus.
The aluminium producer trimmed its 2025 adjusted EBITDA guidance for the ’Extrusions’ segment to approximately 4.5 billion crowns, down from a previous range of 4.5 to 5.5 billion. The revision reflects increased uncertainty in the market.
Hydro added that if the demand recovery projected by metals consultancy CRU is delayed further, earnings could fall within a lower range of 3.5 billion to 4.0 billion crowns.
RBC Capital Markets analysts said they "expect a negative reaction to today’s results" given the miss to market expectations. Hydro’s shares were down 1.1% in Oslo as of 08:51 GMT.
"The weak spot remains the extrusion divisions where we see consensus downgrades following the guidance downgrade," they added.
The company noted that downstream aluminium markets continued to face pressure in the first quarter, with sluggish demand and tighter recycling margins across Europe and North America.
While recent 25% tariffs have raised the cost of importing aluminium, Hydro CEO Eivind Kallevik said the broader trade dispute is unlikely to have a direct effect on the company.
“We are closely monitoring the situation and remain ready to adapt to market changes, particularly if reduced consumer confidence leads to broader economic uncertainty,” he said.
Hydro also reaffirmed its focus on maintaining access to the European market for its Norwegian production and improving efficiency in its North American operations.