Alcoa reports $231m net loss as production, shipments decline in Q1

Image credit: Alcoa

Australian mining firm Alumina Limited announced Alcoa Corporation’s Q1 earnings results, revealing a loss of $231 million, which is a significant contrast to the profit the company recorded in the same period a year earlier, owing to a decrease in shipments and production. 

In an ASX announcement, Alumina reported that Alcoa swung to a net income loss of  $1.30/share, from a profit of $469M, or $2.54/share, in the year-earlier quarter.

On an adjusted basis, Alcoa’s Q1 loss was $41 million, or $0.23 per share, compared to a profit of $577 million, or $3.06 per share, in Q1 2022 and a loss of $144 million, or $0.92 per share, in Q4 2022.

Alumina production declined by nine per cent year on year to 2.8M metric tons in Q1, but aluminium production remained comparable with Q4 at 518,000 metric tons due to the resumption of the Alumar smelter, offset by fewer days in Q1.

In particular, Alumina segment exports decreased 13 per cent Q/Q, principally as a result of decreased refinery output, particularly at the Kwinana refinery in Australia and the San Ciprián refinery in Spain as a result of natural gas-related problems in their respective locations.

Shipments of the aluminium segment decreased by six per cent as a result of fewer trading possibilities and lower volumes from Canadian smelters due to timing issues, which were somewhat offset by higher volumes from the restart of the Alumar smelter in Brazil.

On a positive note, the company’s overall third-party revenue of $2.7 billion was comparable with the previous quarter as lower shipments offset higher pricing in both the aluminium and alumina businesses.

The average realised third-party price of alumina climbed by eight per cent on average over time, whereas the price of aluminium increased by seven per cent on average.

Alumina Limited’s CEO, Mike Ferraro, said he remains confident that Alcoa will achieve growth in the upcoming quarters.

“Despite these near-term challenges, the longer-term outlook for the alumina market is positive, with the anticipated growth in aluminium metal consumption driven by de-carbonisation. AWAC’s portfolio of bauxite and refinery assets provides Alumina Limited with a unique position to benefit from this growth,” Ferraro noted.