Pittsburgh aluminium pioneer Alcoa Corporation released results for the third quarter yesterday as well as announcing a multi-year portfolio review and an update to the firm’s strategic priorities.
In the just-ended quarter, Alcoa reported a net loss of US$221 million, up from a net loss of US$402 million in the prior quarter, and an adjusted net loss of US$82 million, down by US$80 million from the quarter prior. The firm counted US$388 million of adjusted EBITDA in the quarter, excluding special items, and posted a revenue of US$2.6 billion.
The third quarter ended with Alcoa in possession of US$174 million in cash from operations, with a free cash flow of US$87 million. The firm reported a cash balance of US$841 million, with US$1.8 billion in debt at the quarter’s end, netting out at a debt of US$965 million.
President and Chief Executive Officer Roy Harvey elaborated upon the quarter’s results in comments made in a related press release.
“Our third quarter showed continued strong operational performance and stability across our aluminum value chain. Our Bauxite and Alumina segments reached new quarterly production records since our launch in 2016, and our aluminum business continued to rebound. While market and pricing challenges persisted through the quarter, our cash balance remained steady.”
Along with quarterly results, Alcoa announced a multi-year portfolio review, which the firm says is aimed at lowering costs and achieving sustainable profitability. Included in the initiative will be a 12-to-18-month push to increase non-core asset sales to between US$500 million and US$1 billion and a 5-year plan to review 1.5 million metric tons per annum of aluminium smelting capacity and 4 million metric tons per annum of alumina refining capacity.
“Since our inception as a public company in 2016, we have relentlessly focused on strengthening our Company through portfolio and balance sheet actions,” explained Harvey. “Just last month, we introduced a new operating model to create a leaner, more operator-centric organization, and today we are announcing a significant review of our portfolio that demonstrates a drive for continued improvement.”
Upon completion of the review, Alcoa plans to be the lowest emitter of carbon dioxide among the world’s major aluminium smelters.
Finally, Alcoa said it adjusted its strategic priorities established shortly after its split with Arconic, altering the list to replace aiming for a stronger balance sheet to increasing sustainability.
“We believe our updated strategic priority aligns well with increased demand for sustainably-sourced materials and provides a path towards meaningful differentiation that is both profitable and responsible. As we look to the future, two trends in the aluminum industry are apparent. First, the inherently eco-friendly qualities of aluminum will continue to drive global demand growth. Second, our ability to produce responsibly-sourced aluminum will be valued by customers and the marketplace.”
“We intend to win in our marketplace by strengthening our Company with a comprehensive view of sustainability and by building upon our strong capabilities and globally recognized reputation,” concluded Harvey.