Alcoa profit doubles from gains

Alcoa Corp’s third-quarter profit more than doubled from a year earlier as it benefited from mark-to-market gains rather than an improvement in the core business.

“During the third quarter, we ... delivered improved refinery performance, and increased production across our smelting portfolio,” said Alcoa President and CEO William Oplinger.

The US-based company reported net income attributable to shareholders of US$483 million, or US$1.81 a diluted share, for the three months to September 30, against US$232 million, or 88 US cents, a year earlier. Revenue rose 23.7 per cent to US$3.70 billion.

Measured against the previous quarter the picture ebbs, with revenue down 6.6 per cent from US$3.97 billion.

“Sequentially, the results reflect favourable mark-to-market changes on the Saudi Arabian Mining Company (Ma’aden) shares and energy contracts, improved production costs, and higher alumina prices, partially offset by lower aluminium prices and shipments,” Oplinger stated.

Alcoa said better production costs in both its alumina and aluminium segments and higher alumina prices were more than offset by weaker aluminium prices and shipments.

Alumina output rose 11 per cent sequentially to 2.5 million tonnes on improved stability at the Pinjarra refinery in Western Australia. Aluminium production increased 2 per cent to 649,000 tonnes, a sixth consecutive quarterly rise, helped by the completed restart of the Alumar smelter in Brazil. The company said it set year-to-date production records at five smelters and one refinery. Aluminium shipments fell 5 per cent to 693,000 tonnes.

The quarter’s defining event was on the balance sheet. Alcoa raised US$2.6 billion towards its US$4.1-billion purchase of South32 Ltd’s bauxite, alumina and aluminium interests, known as AliGroup, selling US$1.5 billion of 6.625 per cent notes due 2034 and US$1.1 billion of 6.875 per cent notes due 2036 on September 23.

“As we look ahead, we remain focused on strengthening safety performance, sustaining operational stability, and building on this momentum as we work towards closing the AliGroup acquisition in the first half of 2027,” Oplinger stated.

Total debt almost doubled to US$4.82 billion from US$2.45 billion. South32 shareholders approved the sale of AliGroup on October 15.

Cash from operations was US$643 million and free cash flow US$472 million, leaving quarter-end cash of US$4.4 billion.

Alcoa also agreed to sell portions of its Massena East site in New York, with proceeds of up to US$315 million tied to data centre capacity the buyer develops. It expects US$50 million to US$65 million at closing, within six months.

The company reaffirmed 2026 production guidance and said it expects higher output and shipments in both segments in the fourth quarter.

Alcoa mines bauxite, refines it into alumina and smelts aluminium, and describes itself as a pure-play upstream producer. It trades in New York and Sydney.

business@gleanerjm.com