Alcoa’s 2018 EBITDA up 27% on higher alumina and aluminium prices

Alcoa Corporation, a global leader in bauxite, alumina, and aluminium products, announced fourth quarter and full-year 2018 results. The company reported net income of $227 million in 2018, from $217 million in 2017.Excluding special items, adjusted net income stood at $675 million.

Adjusted EBITDA excluding special items was $3.1 billion, up 27% from the $2.4 billion in 2017 on higher alumina and aluminium prices, partially offset by higher costs for raw materials and energy and increased maintenance expense.

President and Chief Executive Officer Roy Harvey said: “Our 2018 results reflect how we’ve made Alcoa stronger. We’ve built upon the progress we made since our launch, and by executing our strategic priorities to reduce complexity, drive returns, and strengthen the balance sheet, we’re now better positioned to thrive through market cycles.”

Revenue increased 15%YoY to $13.4 billion, mainly attributable to higher realized prices for alumina and aluminium products. Cash from operations was $448 million and free cash flow was $49 million in 2018.

In fourth quarter 2018, Alcoa reported net income of $43 million, compared to a net loss of $41 million.  Excluding the impact of special items, adjusted net income was $125 million.

Harvey commented: “Despite sequentially weaker commodity prices, we had a strong fourth quarter with higher profits in our Bauxite and Alumina segments. With the help of higher market prices earlier in the year, we increased annual profits, addressed liabilities, significantly strengthened our balance sheet, and began returning cash to stockholders.

Adjusted EBITDA excluding special items fell 6% QoQ to $749 million in fourth quarter 2018.The sequential decline was primarily due to lower aluminium prices and Brazil energy sales, partially offset by increased shipments across all three segments.

Revenue was $3.3 billion, down 1% sequentially, mainly attributable to lower realized prices for primary aluminium, alumina, and Brazil energy sales. Cash from operations was $535 million and free cash flow was $387 million.

Alcoa ended fourth quarter 2018 with cash on hand of $1.1 billion and debt of $1.8 billion, for net debt of $0.7 billion.