Iconic Pittsburgh aluminium smelter Alcoa Corporation released results for the second quarter on Wednesday. Numbers were up across the board thanks in part to strong pricing for both alumina and aluminium.
Alcoa’s revenue in the second quarter totaled US$3,579 million, up from both last quarter’s total of US$3,090 million and last year’s second-quarter total of US$2,859 million. The firm chalks up the improvement to a rise in realized alumina prices and increased shipments of primary aluminium.
Net income attributable to Alcoa Corporation in the quarter totaled US$75 million, down by half from the prior quarter’s total of US$150 million, but level with the second quarter of 2017, when it was an identical US$75 million. Alcoa says the latest quarter’s net income reflects a negative impact of US$211 million due to non-cash settlement charges relating to Canadian pension plans, costs associated with the Wenatchee smelter, and a loss on an issue between the firm and a contractor that was settled in arbitration.
Adjusted income in the second quarter totaled US$286 million, an improvement over the previous quarter’s total of US$145 million and better than last year’s second-quarter total of US$116 million.
Adjusted EBITDA excluding special items came to US$904 million in the second quarter, up quarter-on-quarter from the opening quarter’s total of US$653 million, and up year-on-year from last year’s second-quarter adjusted EBITDA of US$505 million. A boost in aluminium and alumina prices boosted the total, with an unfavorable product mix and higher input costs slightly pulling down the total.
Alcoa President and Chief Executive Officer Roy Harvey noted the strong returns in the quarter, stating that the favorable financial picture aided in the company’s quest to meet its financial goals.
“Market pricing continued to be favorable in the second quarter and drove a 38 percent sequential increase in adjusted EBITDA excluding special items. These market tailwinds also facilitated greater progress on our strategic priorities to reduce complexity in our Company, drive returns from our assets, and address pension liabilities to strengthen the balance sheet for the long-term.
“While markets and trade dynamics are likely to remain fluid, we will continue to be focused on driving value for our stockholders through all market cycles.”
Going forward, Alcoa projects the year’s total adjusted EBITDA to total between US$3.0 billion and US$3.2 billion, which represents a slight pull-back from the first quarter’s guidance of US$3.5 billion to US$3.7 billion. Per the firm, the latest numbers are an adjustment based upon market prices, tariffs, a bump in energy costs, and certain impacts upon operations.