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Norsk Hydro Sets New Targets; Plans To Propose To Distribute 70-80 Percent Of FY21 Adj. Net Income

Norwegian energy and aluminum company Norsk Hydro ASA (NHY,NHYDY.PK,NHYDY.PK) Monday announced new improvement targets as well as new sustainability ambitions.

Citing Hydro's balance sheet and strong financials, the company said its Board of Directors aims to propose to distribute 70-80 percent of 2021 adjusted net income to its shareholders. It will be a combination of ordinary dividends and either extraordinary dividends, or a combination of extraordinary dividends and share buybacks.

Final distribution for 2021 will be proposed by the Board at the fourth quarter release in February 2022, and subject to approval by the Annual General meeting in May 2022.

At Hydro's Capital Markets Day 2021 today, the company will also give an update on the strategic direction toward 2025 on low-carbon aluminium and new energy.

During 2021, Hydro said it has continued to deliver on its 2025 strategy, including further strengthening its low-carbon aluminium position as well as maturing business opportunities within new energy solutions.

Disciplined capital allocation remains a key financial focus to support execution of the 2025 strategy. For 2021, Hydro expects NOK 7 billion in investments. The updated capex guidance for 2022 is NOK 11 billion, which includes a roll-over from 2021.

For 2023-2025, the guidance is NOK 10 billion. Hydro will continue to ensure efficient levels of working capital.

Hydro's ambition to deliver at least 10 percent RoaCE over the cycle, with all business areas delivering RoaCE above their cost of capital, remains in place. The 2025 strategy strengthens the robustness of the profitability roadmaps for each business area.

Hydro further said it is launching a new climate ambition, confirming the target of cutting own carbon emissions by 30 percent by 2030 and setting new ambitions of becoming net zero in terms of Scope 1 and 2 carbon emissions by 2050 or earlier.

The company is pursuing three decarbonization paths to reduce the carbon footprint of aluminium to net zero.

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