At this year's event, Hydro will present its overall strategic direction and performance, including an update on the situation in Brazil and details on the market outlook for 2019 and the long term.
“After the successful acquisition and integration of Extruded Products Solutions, I am more confident than ever that the integrated value chain is the path to a Better, Bigger and Greener Hydro. We are encouraged by the positive long-term trend towards increasing the use of aluminum in modern products and solutions worldwide ”, says President and CEO, Svein Richard Brandtzæg.
In the short term, Hydro is working hard to resume operations at Alunorte, after nine months of 50% production.
“Our goal is to establish a common platform with the authorities and the judicial system to have an aligned path towards total production, using the best technology available. We have what it takes: the right people, the right technology and the right spirit ”, says Brandtzæg.
Positive long-term prospects for aluminum - and Hydro
Aluminum remains the fastest growing base metal in the world due to its strong inherent properties and high degree of versatility in use. Global demand for primary aluminum is expected to grow by 2 to 3% in 2019, with a continued deficit in the global primary market. Global demand is expected to grow 2 to 3% per year for the next 10 years, with global semis demand estimated at 3% and recycling at 3 to 4% per year in the same period. Aluminum is light, strong and infinitely recyclable, gaining ground as an increasingly important building block with the move towards the low-carbon circular economy.
“We see many examples of strong performance across the company, such as the pilot technology from Karmøy, Norway, the new automotive line in Germany and the continuous improvements in the new Extruded Solutions business area. Integration of Extruded Products Solutions is on the verge of providing 200 million Norwegian kroner in synergies, having already invested half that amount so far in 2018. Based on the industry's most qualified and specialized workforce and our industry-leading positions in innovation and sustainability, our long-term outlook remains positive, ”says Brandtzæg.
Due to the situation in Brazil, Hydro will not be able to deliver its Better program with improvements of NOK 3 billion over a period of four years until the end of 2019. For the same reason, Hydro has failed to maintain the course of several of your medium-term goals.
“We are very disappointed that we cannot continue to improve our injury rate and are completely devastated by the recent death of an employee in Hungary. We are implementing actions across the company with a focus on additional competence and training, ”says Brandtzæg.
Hydro is dedicated to ensuring capital discipline and a solid balance sheet, in addition to providing competitive returns to its shareholders . Shareholder returns continue to be a priority for Hydro, with a dividend policy of 40% return on net profit over the cycle and 1.25 Norwegian crown per share to be considered a threshold. Maintenance CAPEX is estimated at around NOK 6.5 to 7 billion between 2018 and 2021, including investments to improve Alunorte's robustness. The total investment estimate for 2019 is 10 to 10.5 billion Norwegian crowns.