On July 17, 2024, Alcoa Corp (AA, Financial) released its 8-K filing for the second quarter of 2024, showcasing a notable sequential increase in revenue and net income. The company, a leading vertically integrated aluminum producer, reported revenue of $2.9 billion, a 12% increase from the previous quarter's $2.6 billion. Net income attributable to Alcoa Corp was $20 million, or $0.11 per share, a significant turnaround from the previous quarter's net loss of $252 million, or $1.41 per share.
Company Overview
Alcoa Corp is a vertically integrated aluminum company engaged in bauxite mining, alumina refining, and the production of primary aluminum. The company operates through three segments: Bauxite, Alumina, and Aluminum, with the Aluminum segment generating the majority of its revenue. Alcoa derives most of its revenue from the United States.
Performance and Challenges
Alcoa's performance in the second quarter of 2024 was bolstered by higher alumina and aluminum prices, as well as ongoing profitability improvement programs. The company reported adjusted net income of $30 million, or $0.16 per share, compared to an adjusted net loss of $145 million, or $0.81 per share, in the previous quarter. Adjusted EBITDA excluding special items increased to $325 million from $132 million in the first quarter of 2024.
Despite these positive results, Alcoa faces challenges such as higher energy costs and interest expenses. The full curtailment of the Kwinana refinery in Australia also impacted alumina production and shipments.
Financial Achievements
Alcoa's financial achievements in the second quarter of 2024 include:
- Revenue increased by 12% sequentially to $2.9 billion.
- Net income attributable to Alcoa Corp was $20 million, or $0.11 per share.
- Adjusted net income was $30 million, or $0.16 per share.
- Adjusted EBITDA excluding special items increased to $325 million.
- Cash balance at the end of the quarter was $1.4 billion.
Income Statement Highlights
| Metric | 2Q24 | 1Q24 | 2Q23 |
|---|---|---|---|
| Revenue | $2,906 million | $2,599 million | $2,684 million |
| Net Income (Loss) | $20 million | $(252) million | $(102) million |
| Adjusted Net Income (Loss) | $30 million | $(145) million | $(62) million |
| Adjusted EBITDA | $325 million | $132 million | $137 million |
Balance Sheet and Cash Flow
Alcoa ended the second quarter with a cash balance of $1.4 billion. Cash provided from operations was $287 million, while cash used for financing activities was $75 million, primarily related to net payments on short-term borrowings and cash dividends. Cash used for investing activities amounted to $164 million due to capital expenditures.
Key Actions and Outlook
Alcoa is set to complete the acquisition of Alumina Limited by August 1, 2024, and has made significant progress on the ELYSIS technology with Rio Tinto. The company also completed the full curtailment of the Kwinana refinery and continues to work on competitive energy solutions for the San Ciprián complex.
Looking ahead, Alcoa expects total Alumina segment production and shipments to remain unchanged from prior projections, ranging between 9.8 and 10.0 million metric tons and 12.7 and 12.9 million metric tons, respectively. The Aluminum segment's production and shipments are also expected to remain unchanged, ranging between 2.2 and 2.3 million metric tons and 2.5 and 2.6 million metric tons, respectively.
“It was another fast-paced quarter at Alcoa as we approach the closing of the acquisition of Alumina Limited and continue to execute initiatives to further enhance our operations,” said Alcoa President and CEO William F. Oplinger. “Our continuous improvement focus remains high and, along with positive markets, led to stronger results for the second quarter.”
For more detailed information, please refer to Alcoa Corp's 8-K filing.
Explore the complete 8-K earnings release (here) from Alcoa Corp for further details.
