Alcoa Corporation losses 21.7% revenue in 3Q2022 due to lower alumina shipments

For the third quarter of 2022, Alcoa Corporation has reported a quarterly loss of 21.7 per cent in revenue from $3,644 million to $2.851 million, while on a year-on-year basis, it dropped by 8.36 per cent from $3,109 million. Adjusted EBITDA excluding special items nosedived by 77 per cent from $913 million in Q2 2022 to $210 million in Q3 2022 and from the previous year plunged by 71.15 per cent from $728 million.

Alcoa experienced a quarterly net loss of $746 million and a loss per share of $4.17, which includes $652 million of restructuring charges related primarily to pension actions. Alcoa finished the quarter ended September 30, 2022, with a cash balance of $1.4 billion.

Alcoa President and CEO Roy Harvey said: “Despite a challenging quarter that saw significantly lower prices, and high costs for energy and raw materials, we maintained a strong balance sheet, including transferring pension obligations and returning cash to our stockholders.”

He added, “As we move forward, we are keenly focused on the items within our direct control, including boosting operational stability, advancing our breakthrough technologies and continuing to promote our sustainable product offerings so we can benefit from the positive, long-term fundamentals for the aluminum industry.”

Alcoa’s total third-party revenue for the quarter decreased 22 per cent sequentially to $2,851 million, attributing to lower alumina and aluminium prices. The average realized third-party price of alumina dwindled by 16 per cent, while that of aluminium diminished by 17 per cent.

Third-party shipments of both alumina and aluminium decreased 8 per cent Q-o-Q during 3Q2022 due to lower trading volume and decision to reduce production rate at the San Ciprián refinery in Spain.

However, the Q3 production of aluminium remained consistent at 497,000 tonnes compared to the previous quarter. But alumina output dipped 4 per cent to 3.1 million tonnes due to the lower production at the San Ciprián refinery. About 50 per cent of the refinery’s annual capacity was reduced to mitigate exorbitant natural gas prices in Spain.

On August 30, Alcoa announced a one-third production cut at its Lista smelter in Norway for the same reason. However, in Q4 2022, energy situation for the smelter is likely to improve with a power agreement in place for the remaining year and 2023.

Aluminium shipments are most likely to remain stable, ranging between 2.5 and 2.6 million tonnes in 2022. Meanwhile, the projection for alumina shipments is lower to the range between 13.1 and 13.3 million tonnes and for bauxite to 43 and 44 million dry tonnes.