Alcoa (AA) Q4 2023 earnings summary

Executive summary

• 4Q23 revenue was $2.595B; net loss was $150M, while adjusted net loss narrowed to $100M and adjusted EBITDA excluding special items rose to $89M.

• FY23 revenue was $10.551B and adjusted EBITDA excluding special items was $536M, down from $12.451B and $2.224B in FY22; net loss attributable to shareholders was $651M.

Financial highlights

• 4Q23 reported loss per share was $0.84 and adjusted loss per share was $0.56; adjusted net loss excluded $50M of net special items.

• FY23 adjusted net loss was $405M, or $2.27 per share, excluding $246M of net special items; revenue fell 15% as realized metal prices declined and production costs rose.

• Q4 tax expense included a $152M AWAB deferred-tax valuation allowance charge and the non-recurrence of Iceland’s $58M Q3 tax benefit.

• Q4 included the full-year $36M IRA Section 45X credit benefit in cost of goods sold at Massena and Warrick.

Outlook and guidance

• FY24 production outlook: alumina 9.8–10.0M metric tons and aluminum 2.2–2.3M; shipments: alumina 12.7–12.9M, including trading and externally sourced alumina, and aluminum 2.5–2.6M.

• FY24 outlook includes $460M sustaining and $90M return-seeking capital expenditures, $70M pension/OPEB funding and $50M prior-year income tax payments.

• Q1 Alumina adjusted EBITDA expected to face ~$15M of unfavorable Australian maintenance and shipment impacts; lower raw-material and energy costs were expected to be offset by other factors.

• Q1 Aluminum outlook includes $5M unfavorable alumina costs and ~$20M from ended Alumar restart hedges; lower Brazil and Norway energy costs were expected to be offset by lower premiums and non-recurrence of Q4 credits.

• FY24 operational tax expense was expected to be negligible in Q1 based on market conditions, but may vary with markets and jurisdictional profitability.