Norsk Hydro Q2 results miss expectations

Norwegian aluminium producer Norsk Hydro reported disappointing Q2 earnings as strong figures at its primary metals unit were more than offset by weak results elsewhere.

Hydro, one of the biggest global producers, said its results were weighed down by low power production, weak electricity prices, continued losses at its bauxite and alumina division and falling profits for rolled products.

Still, the firm remained upbeat about the broader market as global demand for primary aluminium is rising at its best rate in years, supporting prices after years of production curtailments.

Mr Svein Richard Brandtzaeg CEO of Norsk Hydro said that "Aluminium demand continues to exceed production resulting in a tight market and we see the all in metal prices at their highest levels since 2012.”

Hydro's Q2 underlying operating profit rose to NOK 544 million from NOK 520 million a year earlier but missed expectations for NOK 698 million in a Reuters poll of analysts.

Global aluminium prices have risen sharply this year on increasing demand and capacity closures, offering producers relief after years of falling prices.

Spot aluminium prices are up 13% since the start of the year, trading at a 17 month high while the all in price or including the premium to obtain physical aluminium, is up more than 15% as the market is experiencing its first supply deficit after 6 years of surpluses.