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Alcoa’s Arconic Segments (Value-Add) reports substantial YoY growth in Q2 2016
Market13/Jul/2016AlCircle.comAluminium leader Alcoa has initiated the separation of its upstream and downstream business and the process is going to be complete by H2 2016. The Value-Add segments of Alcoa will be listed under the company Arconic Inc. The separation is subjected to the final approval from the Alcoa Board of Directors; receipt of a favorable IRS ruling and other tax related issues.
Alcoa reported its second quarter 2016 results on July11 2016 and its Arconic (Value-Add) segments grew year-over-year significantly.
Highlights of Arconic Segments (Value-Add) results:
• Revenue of $3.5 billion, up 1 percent year-over-year
• 5 percent revenue increase due to acquisitions, slightly offset by a 4 percent revenue decline due to low metal price
• Record Engineered Products and Solutions revenue of $1.5 billion, up 15 percent year-over-year
• After-tax operating income of $294 million, up 3 percent YoY
• Global Rolled Products: $68 million after-tax operating income
• Record quarter for automotive sheet shipments, up 17 percent YoY
• Record after-tax operating income of $180 million, up 9 percent YoY in Engineered Products and Solutions
• $46 million after-tax operating income, up 5 percent YoY in Transportation and Construction Solutions
• Signed a multi-year contract with Embraer valued at approximately $470 million
• Opened 3D printing metal powder production facility
• Achieved $176 million in productivity savings ($360 million year-to-date)
The technology-driven Arconic Segments (Value-Add) will include the following:
1. Global Rolled Products (other than the rolling mill operations in Warrick, IN and Saudi Arabia, which will move to Alcoa Corporation),
2. Engineered Products and Solutions
3. Transportation and Construction Solutions
These Value-Add segments reported combined revenue of $3.5 billion. ATOI was $294 million and adjusted EBITDA was $567 million in Q2 2016 which register an increase of 3 and 6 per cent, respectively. Alcoa says that all Arconic segments are on track to deliver a combined $650 million in productivity savings in 2016.
As for other projects and acquisitions are concerned, in Q2, the future Arconic signed a contract of about $470 million with Embraer for aluminum sheet and plate for Embraer’s new E2 jet airliners. It also opened a state-of-the-art, 3D printing metal powder production facility at the Alcoa Technology Center. Looking at the growth of aluminium application in the aerospace sector, it aims to produce aluminium, nickel and titanium powder for 3D printed aerospace parts.
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