Alcoa Corporation (NYSE: AA; ASX: AAI) today reported results for the first quarter 2025, a period that included sequential increases in Net income, Adjusted net income and Adjusted EBITDA excluding special items and the announced joint venture to support the San Ciprián (Spain) operations.
Financial Results and Highlights
M, except per share amounts |
1Q25 |
4Q24 |
1Q24 |
||||||
Revenue |
$ |
3,369 |
$ |
3,486 |
$ |
2,599 |
|||
Net income (loss) attributable to Alcoa Corporation |
$ |
548 |
$ |
202 |
$ |
(252 |
) |
||
Income (loss) per share attributable to Alcoa Corporation common shareholders |
$ |
2.07 |
$ |
0.76 |
$ |
(1.41 |
) |
||
Adjusted net income (loss) |
$ |
568 |
$ |
276 |
$ |
(145 |
) |
||
Adjusted income (loss) per common share |
$ |
2.15 |
$ |
1.04 |
$ |
(0.81 |
) |
||
Adjusted EBITDA excluding special items |
$ |
855 |
$ |
677 |
$ |
132 |
|||
- Net income increased 171 percent sequentially to $548 million, or $2.07 per common share
- Adjusted net income increased 106 percent sequentially to $568 million, or $2.15 per common share
- Adjusted EBITDA excluding special items increased to $855 million, a 26 percent increase sequentially
- Managed Alcoa's exposure to newly enacted tariffs through engagement with global policy makers and customers
- Entered into a joint venture with IGNIS Equity Holdings, SL to support the continued operation of the San Ciprián complex
- Repositioned debt with $1 billion issuance in Australia and $890 million tender of existing debt
- Finished the first quarter 2025 with cash of $1.2 billion
"During the first quarter, we maintained our pace of delivering on key operational and capital allocation objectives, including forming the joint venture to support our San Ciprián operations and repositioning debt in Australia," said Alcoa President and CEO William F. Oplinger. "A positive aluminum market led to stronger results for the first quarter, while we continued to focus on safety, stability, and operational excellence amidst economic uncertainty."
First Quarter 2025 Results
- Production: Alumina production decreased 1 percent sequentially to 2.35 million metric tons. In the Aluminum segment, production decreased 1 percent sequentially to 564,000 metric tons primarily due to two fewer days in the period, partially offset by continued progress on the Alumar, Brazil smelter restart.
- Shipments: In the Alumina segment, third-party shipments of alumina decreased 8 percent sequentially primarily due to timing of shipments and decreased trading. In Aluminum, total shipments decreased 5 percent sequentially primarily due to the absence of Ma'aden offtake volumes and timing of shipments.
- Revenue: The Company's total third-party revenue of $3.4 billion decreased 3 percent sequentially. In the Alumina segment, third-party revenue decreased 8 percent on lower shipments, unfavorable currency impacts, and a decrease in average realized third-party price, partially offset by higher volumes and price from bauxite offtake and supply agreements. In the Aluminum segment, third-party revenue was flat on an increase in average realized third-party price, partially offset by lower shipments after strong fourth quarter 2024 results.
- Net income attributable to Alcoa Corporation was $548 million, or $2.07 per common share. Sequentially, the results reflect increased aluminum prices, a net benefit from lower alumina prices, and higher volumes and price from bauxite offtake and supply agreements, partially offset by lower shipments and tariff costs on imported aluminum. Additionally, the results reflect the non-recurrence of a restructuring charge of $82 million related to the Kwinana refinery curtailment and unfavorable currency impacts of $51 million in the fourth quarter 2024. In the first quarter 2025, Alcoa incurred approximately $20 million of tariff costs on imports of aluminum from Canada as the 25 percent tariff under U.S. Section 232 became effective on March 12, 2025.
- Adjusted net income was $568 million, or $2.15 per common share, excluding the impact from net special items of $20 million. Notable special items include $12 million of debt settlement expenses.
- Adjusted EBITDA excluding special items was $855 million, a sequential increase of $178 million primarily due to higher aluminum prices, a net benefit from lower alumina prices, and higher volumes and price from bauxite offtake and supply agreements, partially offset by lower shipments and tariff costs on imported aluminum. Production costs in the Alumina segment decreased primarily due to the non-recurrence of a charge to write down certain inventories to their net realizable value in the fourth quarter 2024. Production costs in the Aluminum segment increased primarily due to the non-recurrence of the full year 2023 and 2024 benefit of $30 million related to Section 45X of the Inflation Reduction Act recorded in the fourth quarter 2024.
- Cash: Alcoa ended the quarter with a cash balance of $1.2 billion. Cash provided from operations was $75 million. Cash provided from financing activities was $77 million primarily related to the repositioning of debt. Cash used for investing activities was $108 million primarily due to capital expenditures of $93 million.
- Working capital: For the first quarter, Receivables from customers of $1.2 billion, Inventories of $2.2 billion and Accounts payable, trade of $1.6 billion comprised DWC working capital. Alcoa reported 47 days working capital, a sequential increase of 13 days. Inventory days increased due to higher raw materials prices and volumes mainly in the Alumina segment and timing of aluminum shipments. Additionally, accounts payable days decreased on lower alumina trading.
Key Actions
- Tariffs: Throughout the first quarter 2025, Alcoa actively engaged with administrations, governments, and policy makers in the U.S. and globally regarding the impact of tariffs on trade flows and the importance of primary aluminum to the U.S. economy through the deeply integrated aluminum supply chain. Additionally, the Company engaged with customers, suppliers and logistics companies to avoid supply disruption.
- Debt repositioning: On March 17, 2025, the Company completed an offering of $500 million aggregate principal amount of 6.125 percent senior notes due in 2030 and an offering of $500 million aggregate principal amount of 6.375 percent senior notes due in 2032. The notes were issued by a wholly-owned subsidiary, Alumina Pty Ltd, incorporated in Australia. Net proceeds of $985 million from the issuances were primarily used to settle $609 million aggregate principal amount tendered and accepted for purchase of outstanding 5.500 percent senior notes due 2027 and $281 million aggregate principal amount tendered and accepted for purchase of outstanding 6.125 percent senior notes due 2028.
- San Ciprián operations: On April 1, 2025, Alcoa announced the formation of a joint venture between Alcoa and IGNIS Equity Holdings, SL (IGNIS EQT) to support the continued operation of the San Ciprián complex. Under the joint venture agreement, effective March 31, 2025, Alcoa owns a 75 percent interest and continues as the managing operator and IGNIS EQT owns a 25 percent interest. Alcoa and IGNIS EQT contributed $81 (€75) million and $27 (€25) million, respectively, to form the joint venture and fund the operations. Additionally, up to $108 (€100) million may be funded by Alcoa as needed for operations with a priority position in future cash returns. The joint venture agreement allows for the planned restart of the San Ciprián smelter in 2025, a commitment made within the Viability Agreement signed with the employees when the smelter was curtailed in 2021 due to exorbitant energy costs.
2025 Outlook
The following outlook does not include reconciliations of the forward-looking non-GAAP financial measures Adjusted EBITDA and Adjusted Net Income, including transformation, intersegment eliminations and other corporate Adjusted EBITDA; operational tax expense; and other expense; each excluding special items, to the most directly comparable forward-looking GAAP financial measures because it is impractical to forecast certain special items, such as restructuring charges and mark-to-market contracts, without unreasonable efforts due to the variability and complexity associated with predicting the occurrence and financial impact of such special items. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
Alcoa expects 2025 total Alumina segment production and shipments to remain unchanged from its prior projection, ranging between 9.5 to 9.7 million metric tons, and between 13.1 and 13.3 million metric tons, respectively. The difference between production and shipments reflects trading volumes and externally sourced alumina to fulfill customer contracts due to the curtailment of the Kwinana refinery.
Alcoa expects 2025 total Aluminum segment production and shipments to remain unchanged from its prior projection, ranging between 2.3 and 2.5 million metric tons, and between 2.6 and 2.8 million metric tons, respectively.
Within the second quarter 2025 Alumina Segment Adjusted EBITDA, the Company expects to maintain the strong level of performance delivered in the first quarter 2025.
For the second quarter 2025, the Aluminum Segment expects sequential unfavorable impacts of $90 million due to U.S. Section 232 tariffs on imports of aluminum from Canada, and $15 million of restart costs for the San Ciprián smelter. Alumina costs in the Aluminum segment are expected to be favorable by $165 million sequentially.
The Company expects Other expenses for the second quarter 2025 to increase approximately $10 million sequentially due to equity investment losses.
Based on current alumina and aluminum market conditions, Alcoa expects second quarter 2025 operational tax benefit to approximate $50 million to $60 million, which may vary with market conditions and jurisdictional profitability.
Conference Call
Alcoa will hold its quarterly conference call at 5:00 p.m. Eastern Daylight Time (EDT) / 7:00 a.m. Australian Eastern Standard Time (AEST) on Wednesday, April 16, 2025 / Thursday, April 17, 2025, to present first quarter 2025 financial results and discuss the business, developments, and market conditions.
The call will be webcast via the Company's homepage on www.alcoa.com. Presentation materials for the call will be available for viewing on the same website at approximately 4:15 p.m. EDT on April 16, 2025 / 6:15 a.m. AEST on April 17, 2025. Call information and related details are available under the "Investors" section of www.alcoa.com.
Dissemination of Company Information
Alcoa intends to make future announcements regarding company developments and financial performance through its website, www.alcoa.com, as well as through press releases, filings with the Securities and Exchange Commission, conference calls, media broadcasts, and webcasts. The Company does not incorporate the information contained on, or accessible through, its corporate website or such other websites or platforms referenced herein into this press release.
About Alcoa Corporation
Alcoa (NYSE: AA; ASX: AAI) is a global industry leader in bauxite, alumina and aluminum products with a vision to reinvent the aluminum industry for a sustainable future. Our purpose is to turn raw potential into real progress, underpinned by Alcoa Values that encompass integrity, operating excellence, care for people and courageous leadership. Since developing the process that made aluminum an affordable and vital part of modern life, our talented Alcoans have developed breakthrough innovations and best practices that have led to improved safety, sustainability, efficiency, and stronger communities wherever we operate.
