Alumina Limited shares jump 2% following the release of Alcoa quarterly earnings report

Alumina Limited, the 40% owner of Alcoa World Alumina & Chemicals (AWAC) – part of the world’s third largest aluminium producer, Alcoa Inc – has seen its shares jump 2% following the release of a quarterly earnings report.

AWAC, which pays dividends to Alumina as part of its major shareholding, achieved a stronger profit result during the quarter, despite lower aluminium spot prices, on the back of a continued fall in the Australian dollar and Brazilian Real (versus the U.S. dollar).

During the period, AWAC produced 3.8 million tonnes of alumina, with Alcoa’s profits from the aluminium ingredient jumping more than 100% year-over-year.

For local shareholders in ASX-listed Alumina, this resulted in $29 million in capital returns and income during the quarter, including a $5 million dividend from the sale of AWAC’s Jamalco bauxite mine and alumina refinery.

Commenting on the result, Alumina CEO Peter Wasow said, “The improved performance reflects further weakness in the Australian Dollar and Brazilian Real which offset slightly lower alumina and LME aluminium prices.”

“Lower energy and caustic soda costs and continued productivity gains also contributed to increased margins in the alumina segment compared to 4Q 2014,” Mr Wasow said.

Capital flows from Alumina to AWAC amounted to just $10,000 during the period and after a final dividend of $45 million in 2014, Alumina’s net debt dropped to $101 million at the end of March 2015.