Alcoa Corporation has recently released its 10-Q report, providing a detailed look at its financial performance and operations. The company, headquartered in Pittsburgh, Pennsylvania, operates through two segments, Alumina and Aluminum, and engages in bauxite mining operations, alumina refining, and aluminum smelting and casting businesses. Alcoa also owns hydro power plants that generate and sell electricity in the wholesale market.
In its latest 10-Q report, Alcoa reported that it continued to progress the acquisition of Alumina Limited during the second quarter of 2024 and announced the completion of the acquisition on August 1, 2024. The acquisition is intended to enhance Alcoa’s position as a leading pure play, upstream aluminum company globally, while simplifying the company’s corporate structure and governance, resulting in greater operational and financial flexibility and strategic optionality.
The acquisition of Alumina Limited involved the exchange of shares, with Alumina Limited shareholders receiving Alcoa CHESS Depositary Interests (CDIs) for each Alumina Share. At closing, Alumina Shares outstanding of 2,760,056,014 and 141,625,403 were exchanged for 78,772,422 and 4,041,989 shares of Alcoa common stock and Alcoa preferred stock, respectively, with an aggregate purchase consideration of approximately $2,800 for Alumina Limited.
The report also detailed Alcoa's portfolio actions, including the full curtailment of the Kwinana refinery in Australia and the progress made in improving the competitiveness of the San Ciprián refinery and smelter. Additionally, the company completed the restart of one potline at its Warrick Operations site in Indiana.
In terms of financial performance, Alcoa reported a net income attributable to the company of $20 in the second quarter of 2024, compared to a net loss of $(252) in the first quarter of 2024. For the six-month period of 2024, the net income attributable to Alcoa Corporation was $(232) compared with $(333) in the six-month period of 2023.
Sales for the quarter ended June 30, 2024, were reported at $2,906 million, a sequential increase of $307 primarily due to higher average realized prices of aluminum and alumina, as well as higher shipments of aluminum and increased volumes and price from bauxite offtake and supply agreements. For the year-to-date period, sales increased by $151, primarily due to higher shipments of aluminum and alumina, and higher average realized price of alumina.
Cost of goods sold as a percentage of sales decreased, primarily due to higher average realized prices of aluminum and alumina and lower production costs, partially offset by higher energy costs primarily due to unfavorable natural gas prices.
The company also highlighted its efforts to enhance its operations and reduce controllable costs, with its smelters in Canada and Norway setting year-to-date production records, and the Alumar smelter increasing operating capacity to approximately 72 percent.
Alcoa's 10-Q report provides a comprehensive overview of its financial performance and strategic initiatives, offering investors and stakeholders valuable insights into the company's operations and outlook. The market has reacted to these announcements by moving the company's shares -6.4% to a price of $29.47. Check out the company's full 10-Q submission here.
