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Sep 30, 2023
Alcoa Q3 2023 Earnings Report
Alcoa reported increased third-party shipments in both segments and a sequential improvement in cash generated from operations, despite lower average realized prices for alumina and aluminum.
Key Takeaways
Alcoa Corporation reported a net loss of $168 million for Q3 2023, with revenue of $2.60 billion. The company saw increased third-party shipments of alumina and aluminum. Alumina production increased, and the company achieved multiple production records across the Canadian smelting system.
Increased third-party shipments of alumina by 11 percent and aluminum by 1 percent sequentially.
Generated $69 million in cash from operations, a sequential improvement of $82 million.
Finished the third quarter with a cash balance of $926 million.
Initiated cost reduction program at the Kwinana refinery in Australia.
Alcoa
Alcoa
Alcoa Revenue by Segment
Revenue by Segment
Third-party alumina sales Revenue
CapyFin.comThird-party aluminum sales Revenue
CapyFin.com Forward Guidance
Alcoa expects total alumina and aluminum shipments to remain unchanged. Within the Alumina segment, the company expects a $50 million benefit from lower raw material prices, lower production costs, and higher volumes, partially offset by $10 million in higher energy costs. Within the Aluminum segment, Alcoa expects $35 million in lower raw material prices to be fully offset by unfavorable value add aluminum products sales and higher production costs. Alumina costs in the Aluminum segment are expected to be favorable by $5 million sequentially. Unfavorable energy impacts of approximately $30 million are expected due to carbon dioxide compensation changes in Norway.
Positive Outlook
- Alumina segment expects a $50 million benefit from lower raw material prices.
- Alumina segment expects a $50 million benefit from lower production costs.
- Alumina segment expects a $50 million benefit from higher volumes.
- Alumina costs in the Aluminum segment are expected to be favorable by $5 million sequentially.
- Potential $20 million adjustment in Q4 to reverse amounts accrued in cost of goods sold for 2023 credits earned through September 30, 2023, pending approval of the Norwegian government's budget proposal.
Challenges Ahead
- Alumina segment expects $10 million in higher energy costs.
- Aluminum segment expects lower raw material prices to be fully offset by unfavorable value add aluminum products sales.
- Aluminum segment expects lower raw material prices to be fully offset by higher production costs.
- Aluminum segment expects unfavorable energy impacts of approximately $30 million due to carbon dioxide compensation changes in Norway.
- Impacts related to lower bauxite grade in Australia are expected to be consistent with the third quarter of 2023.
Revenue & Expenses
Visualization of income flow from segment revenue to net income