Key developments

aluminium factory

For the full year, Hydro's underlying EBIT decreased to NOK 6,425 million compared with NOK 9,656 million in 2015 primarily due to a decrease in realized alumina prices and all-in metal prices, partly compensated by positive currency effects, lower raw material costs and ongoing improvement efforts. In 2016, Bauxite & Alumina achieved record production at both Paragominas and Alunorte, Sapa's performance continued to improve, while Rolled Products delivered a weaker result driven by lower margins and higher costs.

Hydro made good progress on its "Better" improvement ambition targeting NOK 2.9 billion of annual improvements by 2019. For 2016, NOK 1.4 billion of annual improvements were delivered exceeding the 1.1 billion target.

Better-than-expected Chinese primary demand, supported by stimulus measures, in combination with moderate production growth resulted in a global market deficit in 2016. Moreover, the market deficits in the key consumer regions North America and Europe also grew larger. LME prices were at weak levels at the start of the year on the back of low industry costs, but increased slightly during the year supported by tighter market balances and rising energy and alumina prices. On average the USD strengthened against the Norwegian kroner and Brazilian real, benefiting the company’s competitive position.

No fatal accidents occurred in Hydro’s operation, but several incidents with high risk potential occurred. The number of high risk incidents and major accidents continued to fall in 2016, and Hydro's safety performance remains among the best in the industry. The company reduced its TRI rate from 3.0 in 2015 to 2.6 in 2016. The injury rate for contractors also reduced, resulting in the same TRI rate as for own employees. This was the best recorded safety result in the company's history and was better than the target of 2.8 for own employees and 3.0 for contractors for the year.

  • Annual report 2016

  • Annual report 2016

  • Annual report 2016

Updated: January 25, 2017