Alcoa’s Q3 net income marks over a fourfold growth despite weaker operational performance

On Wednesday, October 16, Alcoa Corporation, the world’s eighth-largest aluminium producer, announced its third-quarter results that reflected sequential increases in net income and Adjusted EBITDA amid declines in production and shipments.

According to the figures revealed by Alcoa, the company encountered a havoc surge in net income from $20 million in Q2 2024 to $90 million in Q3 2024, driven by skyrocketed alumina prices amid stable raw material costs. Adjusted net income was $135 million in Q3 2024 versus $30 million in Q2 2024. However, on an annual basis, Alcoa’s net income and adjusted net income shrank from $168 million and $202 million, respectively.

Alcoa’s Adjusted EBITDA (excluding special items) jumped by 250 per cent Q-o-Q and 550 per cent Y-o-Y, amounting to $455 million in the third quarter of 2024 ended September 30.

Revenue stood at $2.9 billion in Q3 2024, up 11.54 per cent Y-o-Y from $2.6 billion but restrained compared to Q2 2024.

Alcoa achieved these robust financial results despite weaker operational performance, especially in the raw material sector. For instance, Alcoa’s alumina production decreased by 4 per cent sequentially to 2.44 million tonnes, primarily due to full curtailment of the Kwinana refinery in June 2024. Alumina shipments also faced a 9 per cent downfall Q-o-Q.

In case of aluminium, shipments decreased 6 per cent sequentially but production increased to 559,000 tonnes owing to continued progress on the Alumar smelter restart.

Strategic actions

During the third quarter of 2024, Alcoa achieved a few critical milestones, such as the acquisition of Alumina Limited, which will position Alcoa as a strong player in the upstream aluminium industry and the attainment of a long-term alumina supply contract from Aluminium Bahrain B.S.C. In addition, Alcoa undertook a strategic move like entering into a binding share purchase and subscription agreement with Saudi Arabian Mining Company (Ma’aden), under which Alcoa will sell its full ownership interest of 25.1 per cent in the Ma’aden joint ventures to Ma’aden for approximately $1.1 billion. 

2024 outlook

Alcoa expects its alumina production to range between 9.8 and 10 million tonnes at the end of 2024, as it projected earlier. For shipments, the company has increased its estimation to 12.9-13.1 million tonnes.

Projection for aluminium production and shipment remain unchanged from the prior forecast, ranging between 2.2-2.3 million tonnes and between 2.5-2.6 million tonnes, respectively.

Alcoa expects its fourth-quarter operational tax expense to hover around $120-130 million based on current alumina and aluminium market conditions.