Alumina Limited (ASX: AWC) notes Alcoa Corp's ('Alcoa') quarterly earnings release.
To assist readers in understanding relevant market, operational and commercial matters of the AWAC joint venture, selected information from the Alcoa Bauxite and Alumina Segments, AWAC joint venture and Alumina Limited plus other market data is attached.
Alumina Limited's CEO, Mike Ferraro, said 'As foreshadowed, AWAC's fourth quarter margins were significantly higher due to the spike in the alumina price caused by production disruptions at a number of refineries. The average one-month lagged API price for the fourth quarter was $423 per tonne, 45% higher than the previous quarter.
Higher energy prices along with rising caustic input prices were the main drivers to increasing production costs in the quarter offset by the resolution of the bauxite unloader issues from 3Q. Sufficient alumina supply has now been restored so that the spot alumina price has eased back to $348 per tonne, still well above the levels experienced through most of the past two years. Freight rates continue to be elevated which has an impact on the Chinese Import Parity Price.
The benefits of the higher margins will be reflected in the AWAC distributions to Alumina Limited in the first quarter of 2022. Net receipts from AWAC were $33.8 million in January 2022 with further distributions expected in February 2022.
The Board will take these exceptional circumstances into account when declaring the 2021 final dividend for Alumina Limited. This may result in bringing forward part of the dividend that would otherwise be paid as a part of the interim dividend in 2022. No decision has yet been made. Alumina Limited had previously advised on 1 November 2021 of Mr Grant Dempsey's resignation as Chief Financial Officer, with Mr Dempsey finishing his employment on 31 January 2022. Ms Galina Kraeva, who is currently General Manager - Finance, will act as Interim Chief Financial Officer.
Ms Kraeva has been employed by the Company since October 2012 and was previously a partner of Price Waterhouse Coopers.'
This ASX announcement was approved and authorised for release by Mike Ferraro, Chief Executive Officer.
Contact:
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About AWAC & Alcoa's Earnings Release
Alumina Limited owns 40% of each of the AWAC entities, which form a part of the Alcoa bauxite & alumina business segments. The Alcoa aluminium business segment includes the AWAC Portland smelting operations. Any closed operations are included in Transformation & legacy pension/OPEB. Therefore, the AWAC results cannot be directly inferred from the Alcoa earnings release. Further, unlike Alumina Limited, Alcoa reports under US GAAP.
Forward-looking statements
This document may contain certain forward-looking statements, including forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. The words 'anticipate', 'aim', 'believe', 'expect', 'project', 'estimate', 'forecast', 'intend', 'likely', 'should', 'could', 'will', 'may', 'target', 'plan' and other similar expressions (including indications of 'objectives') are intended to identify forward-looking statements. Indications of, and guidance on, future financial position and performance and distributions, and statements regarding Alumina Limited's future developments and the market outlook, are also forward looking statements. Any forward-looking statements contained in this document are not guarantees of future performance. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Alumina Limited and its directors, officers, employees and agents that may cause actual results to differ materially from those expressed or implied in such statements. Those risks, uncertainties and other factors include (without limitation): (a) material adverse changes in global economic conditions, alumina or aluminium industry conditions or the markets served by AWAC; (b) changes in production or development costs, production levels or sales agreements; (c) changes in laws, regulations or policies; (d) changes in alumina or aluminium prices or currency exchange rates; (e) Alumina Limited does not hold a majority interest in AWAC and decisions made by majority vote may not be in the best interests of Alumina Limited and (f) the other risk factors summarised in Alumina Limited's Annual Report 2020. Readers should not place undue reliance on forward-looking statements. Except as required by law, Alumina Limited disclaims any responsibility to update or revise any forward-looking statements to reflect any new information or any change in the events, conditions or circumstances on which a statement is based or to which it relates
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