Alcoa(US:AA)2025-05-01 20:19Financial Performance - Alcoa's net income attributable to the corporation was $548 million in Q1 2025, up from $202 million in Q4 2024, reflecting a favorable change of $346 million [125]. - Sales for Q1 2025 were $3,369 million, a decrease of $117 million from Q4 2024, but an increase of $770 million compared to Q1 2024 [124]. - The company recorded a consolidated net income of $548 million in Q1 2025, compared to a net loss of $252 million in Q1 2024 [175]. - Net income increased by $658 million, driven by higher alumina and aluminum pricing, despite higher alumina input costs [183]. - The provision for income taxes in Q1 2025 was $120 million on income before taxes of $668 million, representing an effective tax rate of 18% [135]. Production and Shipments - Aluminum production for Q1 2025 was 564 kmt, a decrease of 1% from Q4 2024, primarily due to two fewer days in the period [164]. - Total aluminum shipments in Q1 2025 were 609 kmt, compared to 641 kmt in Q4 2024 [163]. - Alcoa's third-party shipments of alumina were 2,105 kmt in Q1 2025, down from 2,289 kmt in Q4 2024 [124]. - Alumina production for Q1 2025 was 2,355 kmt, a decrease of 1% from Q4 2024 and a decrease of 12% year-over-year [150][151]. - Alcoa expects total 2025 Alumina segment production to remain unchanged, projected between 9.5 to 9.7 million metric tons [154]. - Alcoa expects total Aluminum segment production for 2025 to remain between 2.3 and 2.5 million metric tons [172]. Pricing and Costs - The average realized price per metric ton of aluminum increased to $3,213 in Q1 2025, compared to $3,006 in Q4 2024 [124]. - The average alumina price index (API) was $612 per metric ton, a decrease of 5% compared to Q4 2024, but an increase of 72% compared to Q1 2024 [146]. - The average LME aluminum price in Q1 2025 was $2,607 per metric ton, with a 57% increase in the Midwest premium due to tariffs on Canadian imports [156]. - The cost of goods sold as a percentage of sales decreased by 5% sequentially in Q1 2025 [127]. - Interest expense increased by $8 million sequentially, totaling $53 million in Q1 2025 [129]. - The company recognized $82 million in increased costs related to the curtailment of the Kwinana refinery [150]. Segment Performance - Total sales for the Alumina segment in Q1 2025 were $2,175 million, down from $2,441 million in Q4 2024 [150]. - Segment Adjusted EBITDA for the Alumina segment was $664 million in Q1 2025, a decrease of $52 million from Q4 2024 but an increase of $525 million year-to-date [150][153]. - Segment Adjusted EBITDA for Q1 2025 was $134 million, down from $194 million in Q4 2024, primarily due to lower shipments [168]. - Third-party aluminum sales increased to $1,955 million in Q1 2025, up from $1,928 million in Q4 2024, driven by a higher average realized price of $3,213 per metric ton [166]. Financing and Investments - The company completed debt issuances totaling $1 billion in March 2025, with net proceeds of $985 million used for various corporate purposes [120]. - The company recorded $985 million in net proceeds from bond issuances in March 2025, including $500 million from 6.125% Senior Notes due 2030 and $500 million from 6.375% Senior Notes due 2032 [189]. - Cash provided from financing activities was $77 million in Q1 2025, a significant decrease from $754 million in Q1 2024 [185]. - Cash used for investing activities was $108 million in Q1 2025, down from $117 million in Q1 2024, primarily for capital expenditures [200]. - The company declared a quarterly cash dividend of $0.10 per share, resulting in cash dividends paid of $26 million in March 2025 [196]. Joint Ventures and Partnerships - Alcoa and IGNIS EQT formed a joint venture for the San Ciprián operations, with Alcoa owning 75% and contributing $81 million [117][118]. - The joint venture agreement with IGNIS EQT was established on March 31, 2025, with Alcoa owning 75% of the San Ciprián operations [140]. - Cash contributions to the ELYSIS partnership amounted to $15 million in Q1 2025 [200]. Compliance and Risk Management - As of March 31, 2025, the company was in compliance with all financial covenants under its $1,250 million revolving credit facility [192]. - The company entered into financial contracts to mitigate risks associated with aluminum prices, natural gas prices, and foreign currency exchange rates [184]. - Alcoa Corporation's long-term debt rating was affirmed as BB with a positive outlook by Standard and Poor's on March 3, 2025 [197]. Restructuring and Charges - Restructuring and other charges were $5 million in Q1 2025, significantly lower than $91 million in Q4 2024 [133]. - The company recorded $44 million in borrowings and repurchased $49 million of inventory related to inventory repurchase agreements in Q1 2025 [188]. Government Relations - The company engaged with U.S. administrations regarding the impact of a new 25% tariff on aluminum imports from Canada, which affects approximately 70% of its Canadian production [116].