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Alumina Ltd AWC

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Morningstar’s Analysis

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Alumina Price Finally Catches Up to Soaring Aluminium Price. No Change to AUD 1.80 FVE

Mark Taylor Senior Equity Analyst

Analyst Note

| Mark Taylor |

Our fair value estimate for no-moat Alumina is unchanged at AUD 1.80 per share. Alumina Ltd owns 40% the world’s largest alumina refining enterprise AWAC. The latter released operational results for the September 2021 quarter with little to surprise. Our 2021 and 2022 EPS forecasts for Alumina are consequently unchanged at AUD 0.11 and AUD 0.25, respectively.

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Company Profile

Business Description

Alumina Ltd. is a forwarding office for Alcoa World Alumina and Chemicals' distributions. Its profit is a 40% equity share of AWAC profit, less head office and interest expenses. Its cash flow consists of AWAC distributions. AWAC investments include substantial global bauxite reserves and alumina refining operations. Declining capital and operating costs and a lack of supply discipline from China are likely to result in competitive pressures, but Alumina's position in the lowest quartile of the industry cost curve is defensive.

Level 36, 2 Southbank Boulevard
Southbank, VIC, 3006, Australia
T +61 386992600
Sector Basic Materials
Industry Aluminum
Most Recent Earnings
Fiscal Year End Dec 31, 2021
Stock Type
Employees 5,500