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Dec 31, 2020
Alcoa Q4 2020 Earnings Report
Alcoa reported strong operational performance, successful execution of cash actions, and progress on its strategy.
Key Takeaways
Alcoa Corporation reported a net loss of $4 million, or $0.02 per share, in Q4 2020. Adjusted net income was $49 million, or $0.26 per share. Adjusted EBITDA excluding special items was $361 million. The company realized a 15 percent sequential increase in sales revenue of value-add products.
Maintained operations safely during the COVID-19 pandemic.
Realized a 15 percent sequential increase in sales revenue of value-add products due to improving demand in the Aluminum segment
Set quarterly production records in the Bauxite segment and the Western Australian alumina refining portfolio
Generated $38 million in cash from operations after making a $250 million contribution to U.S. pension plans
Alcoa
Alcoa
Alcoa Revenue by Segment
Revenue by Segment
Third-party bauxite sales Revenue
CapyFin.comThird-party alumina sales Revenue
CapyFin.comThird-party aluminum sales Revenue
CapyFin.com Forward Guidance
Primary aluminum consumption is expected to increase in both China and ex-China in 2021 with the recovery from the pandemic and the impact of additional stimulus measures.
Positive Outlook
- Total bauxite shipments to range between 49.0 and 50.0 million dry metric tons, an improvement from 2020.
- Total alumina shipments are expected to be between 13.9 and 14.0 million metric tons and stable in comparison to 2020.
- The Aluminum segment is expected to ship between 2.7 and 2.8 million metric tons, a decrease from 2020 related to the changes in the portfolio but well positioned to benefit from the recovery in value-add products.
- Primary aluminum consumption is expected to increase in both China and ex-China in 2021 with the recovery from the pandemic and the impact of additional stimulus measures.
- As supply growth is projected to be lower than demand growth, the global primary aluminum market is anticipated to be closer to balance in 2021.
Challenges Ahead
- Alcoa anticipates lower quarterly performance results in the Bauxite segment due primarily to lower internal bauxite pricing and lower earnings from minority owned mines.
- In the Alumina segment, the Company expects the offsetting benefit from lower bauxite internal prices, partially offset by higher energy costs and seasonal maintenance costs.
- In the Aluminum segment, lower quarterly performance is expected due to higher sequential alumina costs as well as other unfavorable items.
- Based on current alumina and aluminum market conditions, the Company expects first quarter tax expense to approximate $65 million, which may vary with market conditions and jurisdictional profitability.
- The COVID-19 pandemic is ongoing, and its magnitude and duration continue to be unknown. The uncertainty around its future impact on the Company’s business, financial condition, operating results, and cash flows could cause actual results to differ from this outlook.
Revenue & Expenses
Visualization of income flow from segment revenue to net income