Alumina Limited net profit up 110% in H1 2018 on higher global alumina prices

Alumina Limited, a bauxite and alumina company, today reported a net profit after tax of US$286.4 million for the half-year 2018, a 110% increase on the same period of 2017. Margins jumped on the back of higher global alumina prices during H1 2018. AWAC is Alcoa World Alumina & Chemicals, a joint venture which is 40% owned by Alumina Limited and 60% owned by Alcoa Corp.

Total EBITDA increased by US$525.6 million to US$1,208.0 million and margin for alumina refineries increased by $87 per tonne to US$200 per tonne.  Net cash inflows increased by $196.9 million to $660.5 million. The company declared a fully-franked interim dividend of US8.6 cents a share, up from US4.2 cents a year ago.

Commenting on the outstanding results, Alumina’s Chief Executive Officer, Mike Ferraro said, “This has been another outstanding result for the Company, with AWAC’s alumina margins reaching levels not seen since before the GFC”.

“A tight Western world alumina market and structural and environmental reforms in China produced significant price tailwinds for AWAC, with the average realised alumina price up 35% on the previous corresponding period. AWAC contained production cost increases to 11% over the same period despite higher raw material costs…Strong AWAC distributions have continued into the second half of 2018 which has allowed the Company to declare an interim dividend 105% higher than last year,” he added.

Alumina expects current market conditions to continue into the H2 2018 as the Alunorte refinery in Brazil is still running below capacity and China is expected to resume winter production cuts later in the half. Ferraro added that the average alumina price of US$504 per tonne since 1 July 2018 will provide a strong base for AWAC’s H2 result.

Since the beginning of 2018, the Alumina Limited share price has gained 18.52%. The company's share price has climbed 4.35% higher to $2.88 on the release of its half-year results for 2018.