Alumina Limited reports record daily alumina production; Net profit after tax declined 57% in H12020

Alumina Limited reported a statutory net profit after tax of US$90.5 million for the half-year to 30 June 2020, down 57% year on year. Excluding significant items, the net profit after tax was US$87.5 million.

The Company declared an interim, fully franked dividend of 2.8 US cents per share. The Company’s dividend reinvestment plan has been reactivated for this dividend.

The company achieved record daily alumina production for the half. Margin for alumina refineries was US$73 per tonne, a decrease of US$84 per tonne compared to the previous corresponding period and US$24 per tonne sequentially.

EBITDA stood at US$507.1 million, a decrease of US$442.8 million.

Alumina’s Chief Executive Officer, Mike Ferraro, said, “The health and safety of employees is paramount at Alumina and AWAC, and this has never been more important than during the COVID 19 pandemic. AWAC acted early to safeguard employees and operations and as a result was able to not only maintain production, but achieve a daily production record for the half. AWAC’s low cost production has resulted in a cash margin of US$73 per tonne for the first half and has averaged $91 per tonne since the start of the alumina price index in 2010. Consistent cash generation at AWAC, combined with Alumina’s strong balance sheet, means that our enterprise is resilient to shocks and market disruptions and that is reflected in the half year financial performance. Once again, the interim dividend delivers an excellent return to shareholders.

“Primary aluminium demand fell over the first half of 2020 as a result of the pandemic but over the full year aluminium production is expected to be stable. Due to a recent supply disruption in Brazil the global alumina market is expected to be in deficit by around 1.1 million tonnes this year. In the first half there was an increase in aluminium inventories and that is expected to continue in the second half, although at a slower rate as economies slowly recover. The alumina spot price has moved off the lows of April 2020 and has recently increased to US$288 per tonne following the supply disruption.”