Alcoa Posts 124% Q4 Net Income Jump on $11.9B 2024 Revenue

• Q4 revenue up 20% sequentially to $3.5 billion
• Net income rises 124% sequentially to $202 million
• Full year 2024 revenue grows 13% to $11.9 billion
• Completed Alumina Limited acquisition and extended Alba supply agreement
• Curtailment of Kwinana refinery impacts alumina production outlook

Strong Financial Performance

Alcoa Corporation delivered a compelling financial performance in the fourth quarter and full year 2024, underscoring the company’s resilience amid fluctuating commodity markets. Q4 revenue surged 20% sequentially to $3.5 billion, propelled by higher realized prices for alumina and aluminum alongside increased alumina shipments. Net income attributable to Alcoa soared 124% sequentially to $202 million, or $0.76 per share, reflecting both operational improvements and favorable market conditions.

For the full year, Alcoa reported revenue of $11.9 billion, a 13% increase over 2023, with net income turning positive at $60 million compared to a loss of $651 million the prior year. Adjusted net income, which excludes special items such as restructuring charges, rose to $296 million, or $1.35 per share, highlighting the company’s underlying profitability gains.

Operational Highlights and Strategic Moves

Operationally, Alcoa set annual production records at five smelters across the U.S., Canada, and Norway, signaling enhanced stability and efficiency. The company also completed the curtailment of its Kwinana refinery in Australia, a move that contributed to an 8% annual decline in alumina production but is expected to improve long-term cost competitiveness.

Strategically, 2024 was marked by the acquisition of Alumina Limited, expanding Alcoa’s footprint in the alumina market. The company also secured a long-term, 10-year agreement to supply smelter-grade alumina to Aluminium Bahrain B.S.C. (Alba), reinforcing its position in key global markets. Additionally, Alcoa announced an agreement to sell a 25.1% interest in its Ma’aden joint ventures, reflecting ongoing portfolio optimization.

Financial Discipline and Capital Management

Alcoa ended 2024 with a strong cash balance of $1.1 billion, bolstered by $737 million raised through a green bond issuance and the repayment of $385 million in Alumina Limited debt. The company paid $90 million in dividends during the year, maintaining a steady return to shareholders. Free cash flow for the year was positive at $42 million, a significant turnaround from prior years.

Working capital efficiency improved, with days working capital decreasing to 34 days, driven by inventory reductions and higher sales volumes. However, the company faced increased production costs in Q4, including inventory write-downs and restructuring charges related to the Kwinana refinery curtailment.

Outlook and Market Context

Looking ahead, Alcoa projects alumina production in 2025 to decline slightly to between 9.5 and 9.7 million metric tons due to the ongoing impact of the Kwinana curtailment, while alumina shipments are expected to remain stable through increased trading and external sourcing. Aluminum production is forecast to rise to between 2.3 and 2.5 million metric tons, supported by smelter restarts.

The company anticipates some headwinds in Q1 2025, including the absence of certain tax credits and seasonal pricing pressures, but remains focused on operational excellence and competitiveness. CEO William F. Oplinger emphasized the company’s commitment to driving improvements and capitalizing on market opportunities in the year ahead.

Bottom Line?

Alcoa’s 2024 momentum sets a solid foundation, but market volatility and operational shifts will test its 2025 ambitions.

Questions in the middle?

• How will the Kwinana refinery curtailment affect Alcoa’s long-term alumina supply and costs?
• What impact will the Ma’aden joint venture sale have on Alcoa’s earnings and strategic positioning?
• Can Alcoa sustain its profitability gains amid fluctuating alumina and aluminum prices in 2025?