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Alcoa Corporation Reports Fourth Quarter and Full-Year 2019 Results

Metal News - Published on Thu, 16 Jan 2020

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Leader in bauxite, alumina, and aluminum products Alcoa Corporation has reported fourth quarter and full-year 2019 results. Alcoa President and Chief Executive Officer Roy Harvey said “In 2019, we acted to further strengthen Alcoa, completing the divestiture of uncompetitive assets, modernizing labor agreements in three countries, implementing a new operating model, and making quick progress on the asset review process we announced last quarter. While the market in alumina and aluminum challenged us, we maintained a strong cash balance of nearly $900 million and drove operational stability. Also, our low-cost, top-tier bauxite and alumina segments both set new annual production records based on our current portfolio.”

Alcoa reported a net loss of USD 303 million in the fourth quarter of 2019 compared with a net loss of USD 221 million in the third quarter of 2019. Alcoa reported fourth quarter 2019 revenue of USD 2.4 billion, down 5 percent sequentially, due primarily to lower alumina and aluminum prices. For full-year 2019, Alcoa reported a net loss of USD 1,125 million compared with net income of USD 250 million for full-year 2018. Revenue in 2019 was USD 10.4 billion, down 22 percent from 2018, mainly attributable to lower realized prices for alumina and aluminum products.

Heading4Q18 1 3Q19 4Q19 FY18FY19
Revenue $3,344 $2,567 $2,436 $13,403 $10,433
Net income (loss) attributable to Alcoa Corporation $51 ($221)($303)$250 ($1,125)
Earnings (loss) per share attributable to Alcoa Corporation $0.27 ($1.19)($1.63)$1.33 ($6.07)
Adjusted net income (loss) $133 ($82)($57)$698 ($184)
Adjusted earnings (loss) per share $0.70 ($0.44)($0.31)$3.70 ($0.99)
Adjusted EBITDA excluding special items $770 $388 $346 $3,129 $1,656

For 2020, Alcoa projects a global aluminum surplus ranging between 600 thousand to 1 million metric tons with global demand growth in a range of 1.4 percent to 2.4 percent. The Company’s final global aluminum demand growth rate estimate for 2019 was between negative 0.4 percent to negative 0.2 percent with a deficit between 1.1 million and 900 thousand metric tons. The global alumina market closed 2019 with a surplus estimated between 600 thousand metric tons and 1.0 million metric tons, a smaller surplus than the Company’s previous estimate. In 2020, Alcoa expects a balanced alumina market ranging between negative 100 thousand metric tons to positive 700 thousand metric tons. Compared to 2019, the bauxite market is projected to be in a smaller surplus in 2020, with Chinese stockpile projected to continue, ranging between 8 million and 12 million metric tons. The 2019 surplus was lower than previously expected, estimated to be between 10 million and 12 million metric tons.

2020 Outlook - In 2020, the Company projects total bauxite shipments to range between 48.0 and 49.0 million dry metric tons. Total alumina shipments are expected to be between 13.6 and 13.7 million metric tons. The Aluminum segment is expected to ship between 3.0 and 3.1 million metric tons. In the first quarter of 2020, Alcoa expects lower quarterly results in the Bauxite segment primarily due to lower pricing and seasonally lower volumes. In the Alumina segment, the Company expects benefits from lower costs for raw materials and the announced portfolio decision to be mostly offset by lower volumes and higher operating costs due to seasonal maintenance. In the Aluminum segment, the Company expects performance to be flat, as improvements from lower alumina costs are expected to be offset by higher energy costs, lower rolled products shipments, and unfavorable price and mix. Based on current alumina and aluminum market conditions, the Company expects an annual operational tax rate ranging from 70 to 80 percent, which will vary with market conditions and jurisdictional profitability.

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Posted By : Rabi Wangkhem on Thu, 16 Jan 2020
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