Business area outlook for Q1 2025 as provided in the Q4 2024 presentation:

Bauxite & Alumina

• Production at nameplate capacity
• Lower fixed costs
• Lower raw material costs

Important takeaways from the Q4 2024 Earnings Call:
“ We expect lower raw material costs in the range of NOK 100 to 200 million, pending on how raw material prices develops. The positive impact is related to fuel switch being fully implemented and Q4 being impacted by a negative one-off settlement with the gas supplier. Fixed and other costs are expected to decrease by around NOK 700-800 million back to normalized levels, down from seasonally higher fixed costs and social provision in Q4.”

Aluminium Metal

• ~ 71% of primary production for Q1 2025 priced at USD 2 535 per mt.
• ~38% of premiums affecting Q1 2025 booked at USD ~515 per mt. Q1 realized premium expected in the range of USD 400 - 450 per mt.
• Higher Alumina costs, partly offset by lower energy cost
• Higher fixed costs

Important takeaways from the Q4 2024 Earnings Call:

“LME increased in Q4 and is expected to continue to impact positively the revenue side in AM. 
For Q1, AM has booked 71% of primary production at 2,535 USD per tonne including the effect of our strategic hedging program.  Furthermore, we have booked ~38% of premiums affecting Q1 at 515 USD per tonne, and we expect realized premium in the range of 400 - 450 USD per tonne.
On the negative side we expect a further increase in raw material costs of between NOK 750 million and 850 million, driven by higher alumina cost. This is partly offset by lower energy costs of about NOK 250 million due to new long-term power contracts for Albras in Brazil, some of which are related to PPAs sourced through Hydro Rein. Carbon costs are expected to remain stable.  In addition, we expect offsetting positive effect also by our internal alumina hedge with B&A, with a quarter over quarter effect estimated at around NOK 100 million. 
We expect fixed cost to increase between NOK 100 and 200 million, driven by higher project activity related to R&D decarbonization efforts. Sales volumes are expected to remain stable.”

Metal Markets

• Lower results from sourcing and trading activities
• Negative inventory valuation and currency effects
• Seasonally higher results from recyclers
• Continued volatile trading and currency effects
• Guidance for 2025 full year Commercial Adjusted EBITDA excl. currency and inventory valuation effects of NOK 400 – 600 million

Important takeaways from the Q4 2024 Earnings Call:

“Seasonally, Q1 is normally a stronger quarter for recycling than Q4, with higher results primarily driven by increased volume. Margins for recyclers are expected to remain at similar level as in Q4.
In our Commercial segment, we anticipate a lower contribution from sourcing and trading activities in Q1, along with the reversal of inventory valuation and currency effects that impacted Q4. As always, we emphasize the inherent volatility of trading and currency fluctuations.
Each year, we provide full-year guidance for Adjusted EBITDA for the Commercial segment, excluding currency and inventory valuation effects. For 2025, we expect this figure to fall within the range of NOK 400 million to NOK 600 million.”

Extrusions

• Stable sales margins
• Lower sales volumes
• Higher variable costs
• Lower recycling margins and volumes
• Continued soft extrusions markets

Important takeaways from the Q4 2024 Earnings Call:

“Looking into Q1 we should look towards the same quarter last year to capture the seasonal developments in extrusions. Compared with last year, due to continued soft extrusions markets in both Europe and North America, we expect lower sales volumes.
As mentioned earlier, external sources estimate a decline on volume YoY of 4% for North America and 2% for Europe. We also expect continued strong extrusions margins, but the recycling margins continues to be under pressure.
Combined with higher variable and labor costs, we expect the negatives to more than offset the positives in Q1 when comparing year-over-year.”

Energy

• Higher production
• Seasonally higher prices
• Price and volume uncertainty

Important takeaways from the Q4 2024 Earnings Call:

“Looking into Q1, as always, we should be aware of the inherent price and volume uncertainty in Energy.  
For next quarter, production volumes and prices are expected to increase with seasonality into the winter.
Furthermore, we expect the price area difference results to be at similar level as in Q4. The price area differences in Q4 were at NOK 180 million."

Additional information

The latest available price and currency sensitivities for earnings (as well as information on the price time lags for revenues and costs), are included in the NHY Presentation Q4 2024.

Publicly available information regarding the market prices and currency developments in Q4

 

	Q4-24	Q3-24	QoQ	YoY
Average LME 3M market rate1)	2,604	2,421	8%	17%
Average PAX fob Australia (USD/t) 2)	702	507	38%	111%
Energy prices3)
Nordic system NOK/MWh	364	234	56%	-46%
NO5 NOK/MWh	463	212	119%	-42%
NO2 NOK/MWh	628	445	41%	-23%
NO3 NOK/MWh	181	183	-1%	-66%
SE1 NOK/MWh	170	133	27%	-67%
SE2 NOK/MWh	145	136	7%	-72%
NO2 vs NO3 NOK/MWh	447	261	71%	58%
Currencies4)
Average NOK/USD	11,01	10,71	3%	1%
Average NOK/BRL	1,89	1,93	-2%	-13%
Average NOK/EUR	11,76	11,76	0%	1%
Average BRL/USD	5,82	5,55	5%	17%

Please note that these figures have been updated to reflect the full 4rd quarter. 

1) Realized price in AM lags LME market rate with 1-2 months
2) Alumina prices in B&A are realized with approx. one month lag, in AM with 2-3 months lag
3) Source: Nordpool
4) Source: Norges Bank