Norsk Hydro due diligence report.

Oto Suvari
3 min readSep 4, 2019


Hatchworks has conducted due diligence on Norsk Hydro, a global supplier of aluminium and a major player in the light metals industry. It is listed on the Oslo Stock Exchange under the symbol ‘’NHY’’ and in the United States the shares are traded on OTCQX International under the symbol ‘’NHYDY’’.

Norsk Hydro, one of the world’s largest bauxite mines and the world’s largest alumina refinery, has been added to Hatchnet. Their market capitalization is $6.1B. Marketscreener expects that their net-income growth for 2020E may see a significant increase of 237% compared to the year 2019E. Even their net-income growth for 2020E and 2021E shows a solid projected increase of 27%. Therefore, marketscreener expects that Norsk Hydro is generating more net profits in the coming years. Having a look at their net income for 2020E, which is $576M, implies a P/E multiple of 11.5x. Norsk Hydro’s yield is 3.19%.

Marketscreener projects that Norsk Hydro may generate a revenue figure of $17.4B for 2020E which implies an EV/Sales multiple of 0.46x. Some competitors, like Aurubis(NDA), expects to perform better than Norsk Hydro on marketscreener. Aurubis(NDA) P/E multiple is slightly lower at 10.4x and their EV/Sales multiple is 0.14x for the year 2020E. The operating margin for Norsk Hydro is 5.41%, whereas Aurubis(NDA) shows an operating margin of 2.07% on marketscreener. It is important to note that the aluminium industry is pro-cyclical, meaning that it is very dependent on the economic situation. As we may be headed for a global recession, according to our internal analysis, pro-cyclical plays tend to take bigger hits. This, along with not a particularly attractive valuation, means Hatchworks will not participate for now.

The Hatchscore is 5 out of 10. Full details can be found on Hatchnet:

What is Norsk Hydro?

Norsk Hydro is a global supplier of aluminium and aluminium products. It is an important company in the light metal industry as it operates in six segments: Bauxite & Alumina, Primary Metal, Metal Markets, Rolled Products, Extruded Solutions, and Energy.

Big Investors:

  • Parametric Portfolio Associates.
  • Bernstein (Sanford C.)

Advisors and Bookrunners:

  • BNP Paribas.
  • Citigroup.
  • ING Wholesale Banking London.
  • Nordea.

What are the risks?

  • The aluminium industry is pro-cyclical, meaning that it is very dependent on the economic situation. This could result in significant volatility in the market prices in periods of uncertainty or recession.
  • Lack of security like the big Cyber-attack that happened in March, 2019. The initial loss from the cyber attack may exceed $40 million.
  • Hydro operates in a highly competitive market where operational excellence in all parts of the value chain is required to reach and maintain a competitive position.


  • Rusal. (Rusal)
  • Aurubis. (NDA)
  • Schnitzer Steel Industries. (SCHN)

Management team:

  • Hilde Merete Aasheim: CEO.
  • Dag Mejdell: Chairman.

The Hatchworks Team

The forecast figures are based on the data of Marketscreener and not from Hatchworks:

Legal Disclaimer — This report summary has been generated as a result of Hatchworks’ proprietary company vetting and filtering system. The level of due diligence conducted on investible assets conducted ranges from mediocre to significant, the latter being the case where Hatchworks has explicitly taken strategic positions in. By no means is the information in this file to be relied on as investment advice; this includes Hatchworks’ algorithmic composite score known as ’Hatchscore’. You will note that this report does not include a ‘buy’, ‘sell’ or ‘hold’ recommendation. Hatchworks has not received any compensation for this research. For more information you can reach us at This report is not for distribution in the United States of America. It is closed to U.S citizens. If you are a U.S. citizen, you should delete this report or return to sender.



Oto Suvari

Heading up the group’s R&D activities for Hatchworks.