FX.co ★ Hydro Reconfirms 2025 And Medium-term Annual Capex Guidance; To Launch Improvement Program

Hydro has emphasized that its strategic agenda remains pivotal in guiding capital allocation, and maintaining financial discipline continues to be a primary focus through to 2030. For the year 2024, Hydro anticipates an investment of 15 billion Norwegian Kroner. The capital expenditure forecast for 2025 and 2026-2029 remains set at 15 billion Norwegian Kroner annually, adjusted for 2024 real terms, with an increasing portion earmarked for growth and return-driven investments. There is a potential to accelerate growth investments by 1-2 billion Norwegian Kroner per annum, potentially reaching the upper limits of the EBITDA growth targets. Long-term sustaining capital expenditure is projected to be 9.0 billion Norwegian Kroner for 2025 and 8.5 billion Norwegian Kroner each year from 2026 to 2029, in 2024 real terms.

The company highlighted that improvement programs are integral to Hydro's strategy for resilience and value enhancement. Since 2009, Hydro has undertaken three significant multi-year improvement initiatives, with the current program surpassing its original objectives. Hydro expects this program to deliver improvements worth 9.9 billion Kroner by the end of 2024, with additional commercial initiatives contributing an extra 3 billion Kroner in value. Starting in 2025, a new program valued at 6.5 billion Kroner will be introduced, aiming for completion by 2030. The company anticipates that these improvement efforts will bolster the performance of its Recycling and Extrusions operations towards 2030 and reaffirmed its 2030 adjusted EBITDA potential.

In alignment with Hydro's 2030 strategy, the focus on battery materials and green hydrogen as strategic growth areas will be discontinued, and no further capital will be allocated to these sectors. Consequently, the Battery and Havrand businesses will be gradually phased out.

Hydro remains dedicated to ensuring consistent shareholder distributions, with proposals set to be presented by the Board during the fourth quarter release in February 2025.