July 23 (Reuters) - Profit at aluminium producer Norsk Hydro (NHY.OL) , opens new tab sank 18% in the second quarter as extrusion volumes for the metal, energy spot sales and recycling margins all fell and fixed costs climbed, the company said on Tuesday.

Analysts expected profit to remain weak in the third quarter, weighed down by limp aluminium prices and demand.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the quarter ended June 30 of 5.84 billion Norwegian crowns ($533 million) missed the average analyst forecast , opens new tab of 6.15 billion crowns, sending shares down 5.4% in morning trading.

Norsk Hydro said among its challenges were weakened demand in European residential construction, a shortage of aluminium scrap and a slowdown in automotive extrusion tied to a drop in electric vehicle production. Profit fell in its energy segment on lower output and prices.

Aluminium prices have dropped this year as China ramped up its production to nearly a decade high. Peaking at about $3,500 per ton in early 2022, prices have dropped along with demand, to $2,326 per ton.

Those factors offset bright spots, including stronger results in Norsk's bauxite and alumina division, buoyed by higher alumina prices and sales volumes.

Looking ahead, the termination of EV subsidies in German budget talks earlier in July will likely further rein in Norsk Hydro's European aluminium volumes.

JP Morgan analysts expect a slower third-quarter due to falling aluminium prices and reduced demand in the extrusions segment.

Norsk Hydro's new deal to supply low-carbon aluminium to Porsche (PSHG_p.DE) , opens new tab could face challenges after Porsche slashed its sales outlook due to an unexpected aluminium shortage from a supplier's flood-impacted facility.

Recently appointed CEO Eivind Kallevik said in a statement , opens new tabthe company was "executing cost-saving measures and maintaining extrusion margins" to help prop up earnings.

($1 = 10.9549 Norwegian crowns)

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https://www.reuters.com/markets/commodities/aluminium-producer-norsk-hydros-q2-core-profit-falls-below-expectations-2024-07-23/