JOHANNESBURG (miningweekly.com) – US aluminium producer Alcoa is off to a strong start as an independent company, with the firm on Monday reporting first-quarter revenue and profit growth on stronger alumina and aluminium prices.
Alcoa posted net income of $225-million, or $1.21 a share, in the first quarter of 2017, compared with a net loss of $125-million, or $0.68 a share, in fourth quarter 2016, which included costs to streamline the portfolio.
Excluding the impact of special items, first quarter adjusted net income was $117-million, or $0.63 a share. In the fourth quarter of 2016, adjusted net income was $26-million, or $0.14 a share, excluding special items.
Adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda), excluding special items, increased by 59% quarter-on-quarter to $533-million. Revenue rose by 5% quarter-on-quarter to $2.7-billion, reflecting higher alumina and aluminium prices.
“Alcoa is off to a strong start with our first full quarter as an independent company,” Alcoa CEO Roy Harvey said in a statement.
The group recently streamlined its businesses into three segments focused on bauxite, alumina and aluminium.
“In our bauxite segment, our third-party business remained strong and we continued to grow profits, while our alumina and aluminium segments captured the benefits of improved market pricing to increase earnings substantially,” Harvey said.
Alcoa separated from its aerospace and automotive businesses in 2016 and started trading as a standalone company on November 1. Up to Monday’s close, Alcoa had risen 43% since the split.
Alcoa kept its full-year 2017 adjusted Ebitda, excluding special items, guidance unchanged at between $2.1-billion and $2.3-billion, based on April 2017 market assumptions, and net performance of $50-million for the year.
The company is projecting 2017 global aluminium demand growth of 4.5% to 5% and expects a modest global aluminium surplus of 300 000 to 700 000 metric tons.
Alcoa’s former downstream business is trading as Arconic. The industrial company is currently in a proxy fight with Elliott Management, which in January nominated five directors to serve on the Arconic board. Last week, Klaus Kleinfeld resigned as CEO of Arconic, after having sent a letter to a senior Elliott officer without the consultation of the board.