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Alumina Ltd AWC Stock Quote

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Morningstar‘s Stock Analysis AWC

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Alumina’s Outlook Could Worsen Before Improving, AUD 1.40 FVE Retained

Mark Taylor Senior Equity Analyst

Analyst Note

| Mark Taylor |

No-moat-rated Alumina’s first-half 2022 result was strong, with underlying net profit after tax rising 73% to USD 120 million, or AUD 5.9 cents per share. Statutory net profit of USD 168 million benefited from a near-USD 50 million aftertax gain on favourable revaluation of Portland Energy contracts. Alumina’s profit reflects its 40% share of the Alcoa Worldwide Alumina and Chemicals joint venture, or AWAC. At the AWAC level, excluding the uplift in the energy contract revaluation, adjusted EBITDA increased 33% to USD 628 million, better than our AUD 540 million expectations. Higher prices more than offset headwinds from volumes and input cost inflation.

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Key Statistics AWC

Company Profile AWC

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
Industry Aluminum
Most Recent Earnings
Fiscal Year End Dec 31, 2022
Employees 5,500

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