It blamed the impairments on weakness in the Southern European market as well as plant problems in Australia.

"The impairments are a result of a weakening in certain markets and low prices, in combination with raw material and currency pressures," Norsk Hydro said.

It said its extrusion business was exposed to the Southern European market, while the global primary industry was facing strong headwinds from the combination of low metal prices and high cost of raw materials, reflecting imbalances in the markets.

Last month the company said it was to idle one of its three potlines at the Kurri Kurri plant in Australia. It blamed the strong Australian dollar and high raw material costs for the decision and said uncertainty regarding power supply and cost threatened the long-term viability of the plant.

Hydro said the NOK1bn impairment at Kurri Kurri, accounting for most of the writedown, "confirms a challenging financial situation at Kurri Kurri, and the situation is continuously being monitored."

In addition, the firm said it would write down assets within its Building Systems division in Spain, Portugal and Italy by some NOK230M, about half of the carrying value.

The Building Systems initiatives aim to save some 300 million crowns by the end of 2012. About NOK80M of restructuring charges would be realised in Q4 2011, it said.