Aluminum producer Norsk Hydro has managed to ramp up operations at its Alunorte refinery in Brazil despite a cyber attack in March, the firm said on Tuesday, boosting its shares.
The Norwegian company’s stock rose as much as 6% in early trade after it also reported a slightly smaller than expected decline in second-quarter underlying earnings.
“There was no doubt this would be another tough quarter but operationally the company is seemingly on track with the various ramp ups with B&A (the bauxite and alumina division) a notable beat,” Credit Suisse said in a note to clients.
That division, which includes Alunorte, earned 415 million Norwegian crowns ($48 million) in the quarter, beating analysts’ forecast for 163 million crowns.
Alunorte, which turns bauxite into alumina, the refined white powder needed to produce aluminum at smelters, had been forced to operate at half of capacity since a spill in February 2018 led regulators and courts to restrict output.
But in May some restrictions were lifted, allowing Alunorte to run at 80-85% of capacity in June, Hydro said on Tuesday.
Alunorte is the world’s largest alumina refinery with a production capacity of 6.3 million tonnes per year.
Key in the next few months would be the commissioning of a ninth press filter in the autumn, which would increase production to 85-95% of capacity, Hydrosaid.
It also needs to gain permission from a Brazilian federal court to use a second bauxite residue deposit called DRS2. The current one, DRS1, will be full in a year’s time.
Another big challenge for Norsk Hydro has been the cyber attack that paralyzed its IT systems.
The attack is now estimated to have cost 250-300 million crowns [$28.9 million-$34.6 million] in the second quarter, compared with an earlier estimate of 200-250 million crowns [$23.1 million-$28.9 million]. Including the first quarter impact, the total cost of the attack is set to be 550-650 million crowns [$63.5 million-$75.0 million].
Little if any costs are expected in the third quarter as operations are nearly back to normal, Chief Financial Officer Eivind Kallevik told Reuters.
The company is yet to receive payments from its cyber attack insurance – its lead insurer is AIG – and did not say when it would book them.
Underlying second-quarter earnings before interest and tax totaled 875 million crowns, down from 2.7 billion crowns a year earlier, but beating the average forecast of 858 million crowns collected by the company from 14 analysts.