OSLO – Aluminium producer Norsk Hydro reported a smaller- than-expected decline in third-quarter earnings on Wednesday, as a ramp-up in its previously shut Brazilian operation and lower input costs partly compensated for lower metals prices.
Underlying third-quarter earnings before interest and tax fell to 1.37-billion Norwegian crowns from 2.68-billion crowns a year earlier, beating the average forecast of 969-million crowns collected by the company from 14 analysts.
"It is encouraging to see costs coming down in our upstream business, combined with forceful restructuring and optimization measures downstream," CEO Hilde Merete Aasheim said in a statement.
While 'upstream' refers to the production of primary aluminium, Hydro's 'downstream' business involves the process of turning the metal into specific products, such as car parts or beer cans.
The momentum for primary aluminium demand has weakened this year, and Hydro said it expected global demand growth to hover around zero percent, with a range from a negative 0.5% to a positive 0.5% growth. In 2018, aluminium demand grew 3.1%.
Demand for primary aluminium in China was expected to increase by 1% to 2% in 2019, down from 4.1% in 2018 and far below the 8.0% growth in 2017, Hydro said.