Alcoa's Q3 2023 report: Increased shipments and progress amidst market challenges

In Q3 2023, Alcoa Corporation delivered noteworthy results, with increased third-party shipments, enhanced cash flow, and significant achievements.

Highlights:

• They increased third-party alumina shipments by 11 per cent and aluminium by 1 per cent sequentially.
• A cash balance of $926 million was reached by the end of the quarter.
• A quarterly cash dividend of $0.10 per share, totalling $18 million, was paid.
• Progress was made in securing approvals for Western Australia mine plans.
• Multiple production records were achieved in the Canadian smelting system.
• A cost reduction program was initiated at the Kwinana refinery in Australia.
• Greater market penetration was achieved for Alcoa's Sustana™ line of low-carbon products.

William F. Oplinger, Alcoa's President and CEO, emphasised their commitment to long-term success, as he said, "In the third quarter, we saw positive improvements in raw material and production costs, but lower average realised pricing for alumina and aluminium had the biggest impact on our results,” he said. “Moving forward, we are laser-focused on improvement, and we’re working across our global system to increase margins through operational productivity." 

Q3 2023 Results:

• Total third-party revenue decreased to $2.60 billion from $2.68 billion in the previous quarter, primarily due to lower average realised third-party prices for alumina and aluminium. Alumina decreased by 2 per cent, and aluminium fell by 9 per cent.
• Third-party alumina shipments increased by 11 per cent sequentially in the alumina segment, while total shipments in aluminium increased by 1 per cent.
• Alumina production rose by 10 per cent sequentially to 2.8 million tonnes, largely due to increased production at the Alumar refinery in Brazil.
• Alcoa produced 532,000 tonnes in the aluminium segment, a sequential increase of 2 per cent, including several production records across Canadian smelters.
• The net loss attributable to Alcoa Corporation was $168 million, or $0.94 per share. The results were influenced by lower alumina and aluminium prices and currency impacts.
• Adjusted net loss was $202 million, or $1.14 per share, excluding special items.
• Adjusted EBITDA, excluding special items, was $70 million, primarily due to lower aluminium and alumina prices.

Strategic Actions:

• Progress was made in obtaining approvals for Western Australia mine plans.
• Initiatives for cost reduction and productivity improvement were implemented.
• An energy contract was established with AGL Energy Limited to support operations at the Portland Aluminium Smelter in Australia.
• Alcoa ventured into non-metallurgical EcoSource™ low-carbon alumina and EcoLum™ low-carbon aluminium, part of Alcoa's Sustana™ product family.
• The company committed to the Global International Standard for Tailings Management (GISTM) as a member of the International Council on Mining and Metals (ICMM).

2023 Outlook:

Alcoa expects alumina and aluminium shipments to remain between 12.7 and 12.9 million tonnes and 2.5 and 2.6 million tonnes, respectively, for 2023. Projections for Q4 2023 indicate various financial impacts, including energy costs, bauxite grade changes, and operational tax expenses.