Alcoa Corporation has reportedly announced the fourth and full-year results of 2024, demonstrating a strong financial performance led by increased operations and high alumina and aluminium prices.
Image source: Alcoa
Fiscal performance
In the fourth quarter, Alcoa's Q4 revenue was US$3,486 million, up by 20 per cent from US$2,904 million a quarter ago. In the entire year, the revenue amounted to US$11,895 million, experiencing an increase of 12.7 per cent Y-o-Y from US$10,551 million.
The company's adjusted net income in the fourth quarter was US$276 million versus US$135 million in Q3. In the full year, it totalled US$296 million, compared to a net loss of US$405 million in 2023. Adjusted income per share was US$1.04 in Q4, and that in the full year 2024 was US$1.35.
Alcoa's Adjusted EBITDA, excluding special items in Q4, was US$677 million versus US$455 million in Q3 2024, bringing the total Adjusted EBITDA to US$1,589 million at the end of 2024 compared to US$536 million in 2023.
Operational efficiency
Increased shipments in both Q4 and the full year buoyed Alcoa's financial results, coupled with uptrend metal prices. In Q4, Alcoa's third-party alumina shipments increased by 11.55 per cent sequentially in Q4 from US$2.052 million tonnes to 2.289 million tonnes. The total shipments in full-year 2024 amounted to 9.005 million tonnes, up by 3.53 per cent from 8.698 million tonnes in 2023. The annual sales value also increased from US$3,129 million to US$4,281 million.
Aluminium shipments in Q4 were 641,000 tonnes, up by 0.47 per cent from 638,000 tonnes. Full-year shipments rose 3.97 per cent over the year from US$2,491 million to US$2,590 million, generating a sales value of US$7,246 million in 2024 versus US$6,940 million in 2023.
Robust sales value, fuelled by increased global prices averaging at US$2,841 million, primarily drove Alcoa's financial gains through 2024.
Along with sales, Alcoa's aluminium production also grew over the year by 5 per cent, from 2.114 million tonnes to 2.215 million tonnes in 2024. However, alumina production dropped by 8.07 per cent from 10.91 million tonnes in 2023 to 10.03 million tonnes in 2024. Similarly, bauxite production contracted from 41 dry million tonnes to 38.3 dry million tonnes.
Outlook for 2025
For 2025, Alcoa's project for alumina output is further down to a range of 9.5 to 9.7 million tonnes due to the curtailment of the Kwinana refinery. However, shipments are expected to be consistent with 2024, amounting to 13.1 to 13.3 million tonnes. The difference between production and shipment projection reflects the high volume of resources to be sourced externally to meet the supply gap due to the Kwinana closure.
Aluminium production is likely to increase due to the recommencement of smelters, reaching 2.3 to 2.5 million tonnes. Shipments are estimated to range between 2.6 and 2.8 million tonnes.
Alcoa's stock drops, but why?
Despite significant financial improvements in Q4, with sales rising to $3.49 billion from $2.6 billion in Q4 2023 and a net income of $202 million compared to a net loss of $150 million a year earlier, Alcoa's stock declined. As per the report, it decreased by 6 per cent in the past five days.
Truth be told, the decline in stock was driven by Alcoa's cautious outlook for 2025, citing sluggish alumina production and a $60 million sequential negative impact in Q1 2025 due to seasonal factors and other operational challenges.
However, for the long term, the opinion on Alcoa's stock is positive against the backdrop of higher aluminium demand, driven by the automotive, aerospace, and renewable energy sectors, which could boost the company's revenue. Additionally, the company has improved its profitability with $1.1 billion cash in hand at the end of 2024.
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