Alcoa Reports Q2 Revenue of US$3.6 Billion

Alcoa Corporation (NYSE:AA), has released its second quarter 2018 results that reflect continued strong pricing for both alumina and aluminum.

Alcoa is an American-based industrial corporation and the world’s sixth largest producer of aluminium. The company conducts operations in 10 countries.

As quoted from the press release:

• Net income of US$75 million, or US$0.39 per share
• Excluding special items, adjusted net income of US$286 million, or US$1.52 per share
• US$904 million of adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) excluding special items
• Revenue of US$3.6 billion
• US$1.1 billion cash balance and US$1.9 billion of debt, for net debt of US$0.8 billion, as of June 30, 2018
• Alcoa updated its 2018 projection for adjusted EBITDA excluding special items to between US$3.0 billion to US$3.2 billion, down from US$3.5 billion to US$3.7 billion due to current market prices and other factors
• Projecting full-year global deficits for both alumina and aluminum in 2018; surplus for bauxite
• Continuing progress on strategic priorities to reduce complexity, drive returns, and strengthen the balance sheet; used debt proceeds and available cash to reduce net pension liability by US$605 million

Favorable market conditions have also enabled the company to lower volatility risk from its pension obligations. In the second quarter of 2018, Alcoa used the proceeds from a debt offering and available cash to reduce its net pension liability by US$605 million and finished the quarter with a cash balance of US$1.1 billion on June 30, 2018.

“Market pricing continued to be favorable in the second quarter and drove a 38 percent sequential increase in adjusted EBITDA excluding special items,” said Alcoa president and CEO, Roy Harvey. “These market tailwinds also facilitated greater progress on our strategic priorities to reduce complexity in our company, drive returns from our assets, and address pension liabilities to strengthen the balance sheet for the long-term.”

Alcoa also updated its full-year outlook for adjusted EBITDA excluding special items to range between US$3.0 billion to US$3.2 billion1, down from the prior quarter’s range of US$3.5 billion to US$3.7 billion. The new full-year forecast reflects current market prices, tariffs on imported aluminum, increased energy costs, and some operational impacts.

In second quarter 2018, Alcoa reported net income of US$75 million, or US$0.39 per share, compared to US$150 million, or US$0.80 per share, in first quarter 2018. The second quarter results include a negative impact of US$211 million for special items, due primarily to a non-cash settlement charge related to the annuitization of certain defined benefit pension plan obligations in Canada, actions related to the Wenatchee smelter in Washington State, and a loss on a contractor arbitration matter.

Click here to read the full press release