Alcoa Corporation: What Is The Impact Of Increasing Alumina and Aluminum Prices?

Alcoa’s revenue increased sequentially to $2.9 billion, driven by higher alumina and aluminum prices. In the Alumina segment, third-party revenue saw a 5% rise due to increased average realized prices, despite lower shipments. The Aluminum segment reported a 16% increase in third-party revenue, attributed to higher prices and increased shipments. The company reported a net income attributable to Alcoa of $20 million for the second quarter, a significant improvement from the prior quarter’s loss of $252 million, resulting in earnings per share rising by $1.52 to $0.11 per share. On an adjusted basis, net earnings attributable to Alcoa were $30 million or $0.16 per share. Adjusted EBITDA rose by $193 million to $325 million, primarily due to higher realized third party prices for alumina and aluminum, although partially offset by lower volumes and other costs. The Alumina segment’s adjusted EBITDA increased by $47 million, with higher alumina prices more than compensating for increased energy and production costs. The Aluminum segment saw a $183 million rise in adjusted EBITDA, driven by higher metal prices but partially offset by higher alumina costs. Improvements in raw material and production costs outweighed the impacts of lower shipment volumes from the restarted Warrick and Alumar smelters.