Norsk Hydro raises long-term cost cutting target

OSLO: Norwegian aluminium maker Norsk Hydro announced deeper cost cuts as well as plans to grow within metal recycling, renewable energy and in its recently established batteries-making unit, the company said in a strategy update on Thursday.

Hydro, one of the world's largest aluminium makers, now aims to cut costs by 8.5 billion Norwegian crowns ($963.23 million)between 2019 and 2025, up from a previous goal of 7.3 billion crowns from 2019 to 2023, the company said.

Hydro's operations faced major disruptions in recent years, including from a spill in 2018 at a Brazil plant that reduced raw material supplies, a 2019 cyber attack that paralysed the organisation and then the COVID-19 pandemic in 2020.

"We're raising the bar, setting a new ambitious improvement target for 2025, combined with a clear strategy to make Hydro a profitable and sustainable industry leader," Chief Executive Hilde Merete Aasheim said.

Capital expenditure for 2021-2025 is expected to be between 9.0 billion and 9.5 billion Norwegian crowns per year as the company relaxes internal spending restrictions introduced amid the COVID-19 pandemic.

Capital spending for 2020, originally set at 9.5 billion to 10 billion crowns, was eventually slashed to just 7 billion crowns as Hydro sough to preserve cash and protect its investment grade credit rating.