Alcoa JV shines on Alumina’s H1 FY2017-18 profit

Alumina Limited, the leading Australian resource company with focus on alumina refining, recently announced an impressive profit growth for the first half of 2017, thanks to higher commodity prices realized by its joint venture with Alcoa.  

Alcoa World Alumina and Chemicals (AWAC) reported net profit of US$369.7 million in H1 2017, up from US$72.2 million in the corresponding period previous year. Alumina’s contribution (40 per cent stake in AWAC) to the profit was US$147.1 million.

Alumina has received US$83.6 million in distribution from the JV since June 30 this year. The amount was directed into the company’s fully franked interim dividend of 4.2 US cents per share.

Alumina chief executive Mike Ferraro said Thursday, August 24, “Higher net cash distributions from AWAC have enabled the company to increase its dividend to shareholders.”

The company increased its interim dividend from 2.9 US cents last year and has now suspended its dividend reinvestment plan.

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AWAC’s EBIDTA increased to US$682.4 million in the reviewed period, which the company attributes to higher alumina prices. It remains optimistic about global aluminium demand, which Ferraro says would continue to grow thereby keeping demand high for alumina and bauxite.

Alumina has set its annual aluminium production target at 12.6 million tonnes. However, the average cost of production will increase by US$9-US$202 per tonne, the company said.