Alcoa Corporation Announces Q3 2019 Results

Global leader in bauxite, alumina, and aluminum products, Alcoa Corporation announced third quarter 2019 results, as well as a multi-year portfolio review aimed at driving lower costs and sustainable profitability with refined strategic priorities. Alcoa reported a net loss of USD 221 million, or USD 1.19 per share, for the third quarter 2019, compared with a net loss of USD 402 million, or USD 2.17 per share, in the second quarter of 2019. The results include USD 139 million of special items, including USD 134 million in charges associated with the divestiture of the Avilés and La Coruña facilities in Spain, and a USD 37 million restructuring charge for severance costs related to implementing a new operating model, both as previously announced. The charges related to those two items were partially offset by a net benefit of USD 32 million in other special items.

The Company anticipates the majority of the restructuring costs associated with the new operating model will be paid in cash in the fourth quarter 2019 with the remainder in the first quarter 2020. The new operating model is expected to result in annual savings of approximately USD 60 million in operating costs beginning in the second quarter of 2020.

The new model, which goes into effect on November 1, 2019, will result in a leaner corporate structure, with operations more closely connected to leadership, through elimination of the Company’s business unit structure and consolidation of sales, procurement and other commercial capabilities at an enterprise level.

Excluding the impact of special items, third quarter 2019 adjusted net loss was USD 82 million, or USD 0.44 per share, compared with a second quarter 2019 adjusted net loss of USD 2 million, or USD 0.01 per share.

In the third quarter, Alcoa reported adjusted EBITDA excluding special items of USD 388 million, down USD 67 million from the prior quarter, primarily due to lower alumina pricing that was partially offset by higher alumina sales volume and lower production costs.

Alcoa reported third quarter revenue of USD 2.6 billion, down 5 percent sequentially due primarily to lower alumina prices.

President and Chief Executive Officer Roy Harvey said that “Our third quarter showed continued strong operational performance and stability across our aluminum value chain. Our Bauxite and Alumina segments reached new quarterly production records since our launch in 2016, and our aluminum business continued to rebound. While market and pricing challenges persisted through the quarter, our cash balance remained steady.”

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