Alcoa reports consistent revenue earning at $2,670 million for 1Q2023, as higher aluminium price offset reduced shipment

Alcoa Corporation, the world’s eighth largest producer of aluminium, announced the first quarter 2023 results, reporting steady revenue earning at $2,670 million compared to $2,663 million in the previous quarter, attributed to the 8 per cent increase in average-realized third-party alumina price and 7 per cent in aluminium price. However, on a year-on-year calculation, the revenue decreased by 18.92 per cent from $3,293 million, as higher prices were partially offset by reduced shipments.

In the alumina segment, third-party shipments dwindled by 13 per cent sequentially due to lower production, especially at the Kwinana refinery in Australia and San Ciprián in Spain, caused by the lack of natural gas supply.

Third-party aluminium shipments fell 6 per cent Q-o-Q due to fewer trading opportunities and less production at the Canadian smelters.

Net loss attributable to Alcoa Corporation of $231 million or $1.30 per share improved sequentially from $395 million. Adjusted EBITDA excluding special items was $240 million compared to $29 million in Q4 2022.

Alcoa ended the quarter on March 31, 2023, with a cash balance of $1.1 billion. Cash used for operations was $163 million, and investing activities $102 million, primarily related to capital expenditures.

Coming to production, Alcoa posted a 9 per cent decline in alumina output to 2.8 million tonnes sequentially. Aluminium production stood at 518,000 tonnes, consistent with the fourth quarter’s strong output due to the restart of the Alumar smelter but offset by fewer days in the first quarter.

Projecting 2023, Alcoa revealed its total alumina and aluminium shipment expectation remained unchanged between 12.7 and 12.9 million tonnes and 2.5 and 2.6 million tonnes, respectively.

The company also expects lower sequential Adjusted EBITDA in alumina segment of approximately $55 million in Q2 2023 due to reduced operations at Kwinana and Pinjarra refineries for the lower-grade bauxite availability.

On the other hand, the aluminium segment Adjusted EBITDA is foreseen to improve by $30 million on favourable raw materials, volume and lower production costs.

Alcoa President and CEO Roy Harvey said, “In the first quarter of 2023, we saw improvement in some key financial metrics, including a $211 million sequential gain in Adjusted EBITDA, and we continued to maintain a strong balance sheet. We’re also making important progress in stabilizing our operations, with teams working to improve on a minute-by-minute, day-by-day basis. We plan to build on that momentum as we tackle a host of complex issues, including developing breakthrough technologies and addressing increased expectations from stakeholders.”