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Aluminum manufacturer Norsk Hydro (OTCQX:NHYDY) (OTCQX:NHYKF) said it raised its long-term cost-cutting and profit targets, but the news was offset by guidance for higher capital spending and a disappointing dividend payout outlook, Reuters reported Wednesday.
Norsk Hydro (OTCQX:NHYDY) (OTCQX:NHYKF) said its extrusions business, which turns slabs of aluminum into car parts and other products, will aim for EBITDA of 10B-12B Norwegian crowns in 2030, up from NOK7B in 2022.
The company also said it plans to reach annual cost reductions of NOK14B in 2030, compared to its previous target of cutting NOK11B by 2027.
Forecasting an annual “greener earnings uplift” of NOK2B (~$188M/year) by 2030, “we are stepping up growth ambitions in extrusions, recycling and renewable power generation aimed at capturing market opportunities emerging from the green transition,” Norsk Hydro (OTCQX:NHYDY) (OTCQX:NHYKF) CEO Hilde Merete Aasheim said.
But Norsk Hydro (OTCQX:NHYDY) (OTCQX:NHYKF) also raised guidance for annual capital spending in 2024-28 to NOK15B from NOK12.5B expected a year ago for 2024-26, and said it plans to hand 50%-60% of 2023 profits to owners in dividends and stock buybacks, compared to a 62% cash dividend for 2022.
J.P. Morgan analysts said that although higher long-term profit targets are positive, the capex guidance was modestly higher than expected and shareholder returns guidance was below consensus.
