Hydro expects gas cost impact of between 90 and 110 million dollars in fourth quarter
Key Facts
Norsk Hydro estimated the impact of the gas cost differential at Alunorte at between 90 and 110 million dollars in the fourth quarter of 2026, according to an October update on the supply situation. The estimate reflects the difference between the cost of securing gas on the market and the contracted supply price. The company said Alunorte had not received the gas shipments stipulated in its contracts. The facility "is currently purchasing gas on the market at spot prices," it said in the update. This means gas to operate Alunorte is being secured at prices above the contract price, the factor underpinning the company's estimate of the fourth-quarter financial impact.
Disruptions to gas supplies from supplier Celba had prompted Alunorte to cut alumina production to 50% of its level, according to Hydro's announcement in August 2026. The company estimated lost production during the curtailment at between 100,000 and 120,000 tonnes of alumina. In its August estimate, it put the potential financial impact on the Bauxite & Alumina segment in the third quarter of 2026 at between 75 and 100 million dollars. That estimate included the impact of lower production and gas purchases above the contracted price. The supply disruption thus affected two aspects of Alunorte's operations during that period: the volume of alumina produced and the cost of gas purchased to operate the facility.
On its previous financial performance, Hydro reported adjusted earnings before interest, taxes, depreciation and amortisation of 8,923 million Norwegian kroner in the second quarter of 2026. The company attributed part of the improvement in that quarter's results to higher aluminium prices and product premiums. It added that improved earnings from its recycling business also supported financial performance. "Higher aluminium prices and product premiums contributed positively, alongside improved earnings from the recycling business," it said in its results announcement. In the third quarter of 2025, the corresponding period for third-quarter 2026 results, adjusted earnings before interest, taxes, depreciation and amortisation stood at 5,996 million Norwegian kroner, according to the company's announcement for that period.
On electricity supplies, Hydro Energy and Statkraft signed a long-term power purchase agreement, according to Hydro's announcement of the contract. The agreement secures annual supplies of 876 gigawatt-hours. The contracted supplies cover the period from 2031 to 2040, with the agreement specifying the annual electricity volume and the supply term. In another development involving energy assets, Hydro said it expected to receive compensation of about 28 million euros following completion of the sale of the Swedish wind farm Cloud Snurran. The company linked its expectation of receiving this compensation to completion of the sale, according to its announcement on the transaction.
Hydro set 23 October 2026 as the date for reporting third-quarter results, according to the invitation published in its financial calendar. On operations, the company expected aluminium production at Slovalco to begin in the fourth quarter of 2026. The anticipated start of production is part of the plan to restart the plant, according to Hydro's announcement on Slovalco. Next on its schedule, the company will hold its investor day in London on 25 November 2026. Hydro said the event would also offer virtual participation alongside the London gathering.