Key developments

Underlying EBIT more than doubled in 2014 amounting to NOK 5,692 million compared with NOK 2,725 million in the previous year influenced by a significant increase in all-in metal prices together with the strengthening U.S. dollar compared to the NOK and BRL. Higher realized alumina prices, higher alumina sales volumes and lower operating costs for Bauxite & Alumina also made a significant contribution to underlying results for the year.

Several years of significant operational and commercial improvements implemented throughout the value chain have strengthened Hydro's ability to create value in an environment of stronger market fundamentals. Dedicated programs in Hydro's core business areas have generated roughly NOK 3.7 billion in annual improvements by the end of 2014. Additional savings of 1.5 billion relating to these programs are expected to be realized by the end of 2016.

Following several years of challenging market conditions, the global aluminium market has improved with higher all-in metal prices, and a better demand and supply balance for primary aluminium with a market deficit of around one million mt in the world outside China. Considerable weakening of the Norwegian kroner and Brazilian real against the US dollar, both major cost currencies for Hydro's operations, has strengthened the company's competitive position. However, significant uncertainty continues surrounding general economic developments in Europe in particular, together with the risk of increasing exports of fabricated and semi-finished products from China.

Hydro met its most important target of no fatal accidents in 2014, and the number of serious accidents was at historically low levels. Hydro's safety performance is among the best in the industry and we reduced our TRI rate (total recordable injuries per million hours worked) by six percent in 2014, however, we did not meet our target for the year.

Strategic Direction

A resource-rich, global aluminium company, Hydro intends to continue to drive the performance and profitability of its operations while securing safe, sustainable business practices.

Hydro will continue to lift alumina production in Alunorte towards name-plate capacity together with achieving the NOK 1 billion improvement target by the end of 2015. Hydro is committed to sustain realized improvements and to identify further savings for Primary Metal's global portfolio of fully-owned smelters. Optimizing margins by focusing on high premium products will continue to be high on the agenda for Hydro's Metal Markets operations. Hydro intends to improve margins through high-grading its Rolled Products portfolio and differentiation through innovation, quality and reliability.

Hydro is engaged in a systematic dialogue with local, state and federal politicians, industry associations, nongovernmental organizations and local communities regarding the regulatory challenges facing its operations in Brazil underlying the need for competitive and predictable framework conditions for Hydro's operations.

Hydro is intensifying its efforts to improve its TRI rate for 2015. Continued strengthening of the company's compliance activities is also an important objective for 2015. Implementation of Hydro's people strategy will continue in 2015 with an emphasis on people performance and development processes together with on-going focus on strategic workforce planning.


  • Annual report 2014

  • Annual report 2014

  • Annual report 2014

Updated: September 12, 2016