Brazil’s integrated aluminium company CBA reschedules its capex program

The Brazilian integrated aluminium company Companhia Brasileira de Alumínio (CBA) operates in an integrated manner, from mining to the final product has adjusted its capital expenditure (capex) program's timeline due to a progressively demanding price environment.

In its Q2 financial results, CBA stated, "The timeline for expansion projects will be extended, with the expected completion of some projects moving from 2025 to 2027. The main delays are the restart of pot room 1 and the technological upgrade of smelters."

"The capex reduction in the quarter, primarily in the modernization and expansion item, is due to the initiatives to adjust the schedule of projects, which are multi-year and have the flexibility to be reviewed according to operational cash flow and market conditions."

CBA's investment in Q2 totalled 185 million reais (equivalent to US$36 million), showing a decrease from the 234 million reais invested in the preceding three months.

Upon its initial public offering (IPO) debut in 2021, the corporation, affiliated with the Votorantim industrial conglomerate, outlined a future capital expenditure (capex) plan amounting to 2.5 billion reais spanning from 2022 to 2025. The majority of these financial allocations were designated for the advancement of the Rondon bauxite project located in the state of Pará. This project holds significance for the company as it operates a mine within this region.

However, as the company aims to safeguard its cash position in light of reduced aluminium prices, modifications have been made to the capital expenditure schedule. In Q2 2023, the company experienced a 29 per cent decline in net revenues compared to the previous year, amounting to 1.67 billion reais. During this period, the company reported a net loss of 50 million reais, starkly contrasting the net profit of 511 million reais recorded a year ago.

CBA added, "In Q2 2023, aluminium prices continued downward, influenced by concerns over the global economy and its impact on the supply and demand dynamics of the metal."

If you're interested in gaining further insights into the projected trends for South American aluminium production in 2023, please click here.