Pittsburgh aluminium pioneer Alcoa Corporation reported results for the second quarter of 2019 yesterday. Weaker alumina and aluminium prices teamed up with the sale of the firm’s interest in a Saudi Arabian joint venture to scare off profits.
In the second quarter, Alcoa reported revenue of US$2,711 million, essentially level quarter-on-quarter from last quarter’s revenue of US$2,719 million, but down on the year from last year’s second quarter revenue of US$3,579 million.
Alcoa posted a net loss for the quarter of US$402 million, down from the prior quarter’s net loss of US$199 million and a reversal from last year’s second-quarter net profit of US$10 million. The firm noted the impact of special items totaling US$400 million, including $319 million from Alcoa’s divestiture of its interest in Ma’aden Rolling Company (MRC).
Adjusted net loss for the quarter came to US$2 million, an improvement on the quarter from last quarter’s net loss of US$43 million, but a stark contrast for last year’s adjusted net income of US$221 million.
Alcoa’s adjusted EBITDA excluding special items figured at US$455 million, down by US$12 million on the quarter and off by US$328 million on the year. The firm chalks up the drop to lower pricing of alumina and aluminium, a portion of which was offset by increased energy sales and a decline in raw materials costs.
“In the second quarter, our Aluminum segment rebounded despite weaker metal prices, and we reported a solid cash balance, even after sizeable cash outlays,” explained Roy Harvey, Alcoa’s president and CEO. “We also maintained strong operational performance across all of our businesses.”
“In addition, we successfully divested our minority interest in the Saudi joint venture rolling mill, and we made significant progress on other initiatives to reduce losses and increase Company profits. As we enter the second half of the year, we’ll continue to navigate through this market cycle with a sustained focus on safety and operational excellence, finding new ways to further improve the business.”
Alcoa again pared back its forecast for global aluminium demand, dropping expected growth in aluminium use from 2 percent to 3 percent to between 1.25 percent and 2.25 percent. Trade tensions between Washington, D.C. and Beijing partially accounted for the revision, along with macroeconomic headwinds.