AA - Earnings call transcript Q4 2024

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Operator

Good afternoon, and welcome to the Alcoa Corporation Fourth Quarter and Full Year 2024 Earnings Presentation and Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Louis Langlois, Senior Vice President of Treasury and Capital Markets. Please go ahead.

Louis Langlois

Thank you, and good day, everyone. William Molly Corporation and Beerman, Officer. by Executive and Chief today and Officer; Executive joined Oplinger, President Alcoa Chief Financial I'm Vice President

will Bill comments We questions Molly. by your take and after

SEC discussion a expectations included materially Factors from to and subject filings. that will As cause are in today's today's contain statements presentation company's future that and relating assumptions various are differ the these in forward-looking and to may statements events to caveats. our results reminder, actual

have we financial in addition, non-GAAP In included measures this some presentation.

For most historical appendix measures found to non-GAAP to financial measures, the directly can reconciliations the in financial comparable GAAP today's presentation. be

to of reasons means We have slide. adjusted in this reconciliations non-GAAP today financial reference certain noted quantitative EBITDA on measures for not EBITDA. Any presented discussion forward-looking our

announced, earnings are and slide previously our as release the presentation website. press on available Finally,

the I'd to call Bill. turn to Now like over

William Oplinger

Louis, Thank our objectives, our we'll continue everyone, XXXX. XXXX Today, fourth our call. improve plans during you, on conference made substantial in and earnings strengthen market and and welcome, we to results, the XXXX the quarter review company to to progress substantial key

smelters practices injuries start certain metrics. improved Western Let's recap production records. I'm life-altering XXXX. pleased annual our by of we included daily with mine increased which XX a Australia, production, mining had under or rehabilitation fatalities regulators. key our of that safety our operated and We no in X successfully very achieving new with and conditions our of annual observation Nine

high enhance number in relationships customer continuous Commercially, needed sales invested and manufacturing to growth supplier talent that and meet our integrated customers a in products and new their several and and CapEx the improvement. prioritizes roles On promoted a and side, to by of we objectives. critical culture value-add we expanded important onboarded people performance

of EcoSource makes sales metal and In half of we EcoLum our non-metallurgical sales now aluminum line our up of our of products, primary first announced low-carbon in Europe. alumina, Sustana our

savings materials, We schedule our to to raw operating well profitability on financial our improve improvement million ahead performance of changes which $XXX exceeded as and profitability program actions as of the improve competitiveness, delivered included through initiatives portfolio. and

the Also, started In the in fourth with quarter of Ma'aden San the initiated about Limited the maintaining the acquisition our million billion. We XXXX, while long-term with debt of our operations. the dividend. repayment of joint $XXX November, quarterly we Alumina investment of our the we sale valued company today ventures to delevering stakeholders Ciprián $X.X at cooperation improve completed and in progressed outlook the of

a successful To sum up, it XXXX was year Alcoa. at

Now it turn over strong us I'll take to financial the to results. through Molly

Molly Beerman

In was increased revenue In Thank sequentially realized X% Aluminum shipments. revenue up third-party XX% the increased to price you, the realized and XX% Alumina Bill. third-party higher on the third-party price. $X.X segment, Revenue due primarily segment, average to average in higher billion. third-party increase

for the Fourth These was million quarter doubling million an restructuring net per Kwinana results share prior with of curtailment. per include additional the charge $X.XX to common income million, attributable $XX Alcoa quarter $XXX share. earnings $XX versus to

management quarter, equipment related the the fourth for the transition duration the requirements water of costs During the ongoing we increase of and residue evaluation technical treatment. to the and water areas completed for

million. earnings EBITDA increased net On an million million Adjusted adjusted or $XXX $XXX basis, Alcoa $X.XX share. the $XXX per attributable to was to

prices, primarily intersegment increases higher other related all The adjusted EBITDA. reflects prices, EBITDA to Let's while aluminum alumina higher at other costs, segment due increased costs by volume, partially the and lower shipments and key Fourth $XXX drivers eliminations. Outside offset were cost increased being mostly quarter higher the The metal look to Alumina inventory of million, higher segments, production lower expected energy primarily alumina costs. elimination. prices, higher segment cost costs increased significantly expense the requiring energy with by profit gains. alumina as higher improvements, currency and average corporate Aluminum with intersegment by price other slightly more increased, costs and offset higher mostly elimination increased alumina offset

receivables for XXXX. earnings activities in flow We the acquired quarter fourth cash from to Limited transaction. quarter, cash higher full Alumina improved balance to inventory cash year the higher repay and inventories the API This used related and Working under metal prices. year-end by increased the slightly with increased an accounts lower the along on program. in improved the sheet, in debt Moving repayment payables on fourth was and as borrowings partially offset quarter repurchase offset capital accounts to

and capital capital to uses the continue be For changes, working our year, largest environmental payments ARO and cash. expenditures, of

payments restructuring to our approximately approximately million to Spain. $XX our employee in commitments million Kwinana XXXX, in and related $XXX the related Additionally, included curtailment

review profitability on the our we'll improvement Next, performance program.

the bridge exceeded year-over-year financial our a $XXX have already from or million location. target the generally program set improve our results program, profitability improvements We in evident year to are by Overall, was $XXX for our X-year XXXX's low of which million. program EBITDA full

the Through the materials $XXX quarter's target XX, During total on with $XXX approximately company quarter, million $XXX million million. December for of we its to overachieved fourth third a raw progress the in added million savings. year-to-date $XXX

of of the and and deliver quarter the rate the our run end productivity million December Within XXXX. by of actions target first implemented XX, contributing through expect program approximately million $XXX we savings competitiveness $XX to

have Warrick $XX improvements. also portfolio achieved To of target. date, million has $XX million progressed our its We

of expected. U.S. materials IRA we on the inclusion also in received benefit ruling roughly XXX Section Treasury had final of the half from $XX of million credits the annual in which the adds about direct program, We the or

The target we due nearly costs, its has to slow at improvement $XX The capacity. million been target. and $XXX XX% Alumar to $XX deliver work on Kwinana toward million operating achieved currently and transition to savings curtailment will million holding smelter continue the is high approximately restart but

days, primarily key inventory increased X.X%. due XX year-to-date to on Days to return in The on to sales. working is a days on other XX decrease Moving decreased financial sequentially equity capital metrics. days positive

$XX cash billion. $X.X plus capital cash for stockholder quarter Free flow positive to returns. fourth noncontrolling of dividend resulting million net contribution balance interest Our in was quarter, the added a

to look we XXXX, the reposition cash be is us. for ahead where continuing needed delever debt will As jurisdictions to a to priority and

outlook year include To does the and quarter estimates clear, for the the any XXXX. our full to outlook of Turning tariffs. for be first not of impacts potential

million reflects million million the production tonnes, we tonnes. sourced The million shipments between expected range normal to X.X Aluminum to For year, on X.X smelter is produce X.X million well expect The XX.X tonnes. are full and while as to and million externally volumes range to alumina. to range and alumina as million million between and X.X between increasing difference restarts, segment shipments trading X.X X.X our expected tonnes XX.X

million, outside efforts take potential items work monetization slightly transformation costs. from opportunities. and order EBITDA advantage costs will reflecting reflecting the approximately asset to Other be $XXX increased remediation to control improve expect we are In our $XX last overhead of corporate to we in doing expense to to year the segments, continued activity accelerate million,

Below be expect and expense million. is will pension $XXX depreciation we million slightly approximately expense be interest remain at to expected $XXX up million. EBITDA, $XX Nonoperating to at and OPEB

the plan. to spend OPEB XXXX flow that for of impacts, funding OPEB be expect is The at cash million. and pension XXXX required similar cash U.S. For to we majority $XX

allocation Our continue capital will capital stockholders returns framework. with to to be aligned our

unloader to ship projects upcoming mine and capital Canada in moves estimate in Our $XXX seeking. million new to in million bauxite of related a upgrades due sustaining in return is well primarily in energy The $XX XXXX, $XX including number Juruti, $XXX as sustaining reclaiming with $XXX increase million a a to in million million transition is capital a increase expenditure Australia Australia. as major system projects, and over

in investments bauxite our following return-seeking in decrease expect the to Brazil We investment XXXX. vessels

projects to if return they market fund identify expansion capacity meet conditions remain allow. and open to those continue we criteria and However, requests

is We net XXXX. approximately expect saved tax earnings, of cash carryforward the Limited on than the might operating taxes. utilization million $XX in due XXXX based higher million $XX loss, expect amount our income period of XXXX lower you payments which primarily Alumina on to prior approximately That

to use that similar $XXX future tax XXXX remaining to periods, NOL and have percentage to in expected related $XX at limitations. approximately subject We million is million. approximately be annual Environmental ARO spending of to to benefit

provide guidance to the can be reserve, curtailment. million a with the Kwinana Approximately remain majority attributable dispersed Kwinana to $XXX but restructuring large charges portion year to not that share of full do We be cash restructuring XXXX. spent on from the in

to XXXX recorded cycles the first the For nonrecurring partially quarter favorable due volumes. of adjustment segment the approximately offset at the beginning performance be to level, typical by expect inventory fourth first and impacts million by shipping $XX quarter from maintenance quarter, lower we the in of Alumina, in

XX Section offtake quarter, volumes accordance pricing be to Brazil and terms the million segment, the nonrecurring In announced hydroelectric $XX unfavorable true-up in IRA absence the the shipping by the performance the lower due approximately benefit Ma'aden of of with Aluminum to transaction. the fourth we at seasonal facilities, in recorded expect

will be to approximately Alcoa average unfavorable in million. the by of higher While expected overall adjusted Aluminum EBITDA, is alumina the increase segment price cost $XX alumina

in profit for the XXXX costs profit Beyond the volumes. due first inventory of million the additional in intersegment elimination, to quarter we retained standard production to and sensitivity an $XX of lower provided in anticipate related changes income

$XX of triggers million contributions Below fourth are first may loss increase XXXX by EBITDA, which XXXX in to expenses, expected to other negative to due quarter The which foreign impacts losses, of million, included ELYSIS quarter of not the within $XX recur. currency recognition.

quarter $XX week's of Based the million. operational fourth catch-up million a to XXXX to tax million XXXX Note first expense. on expense quarter we the provision tax included $XXX last $XXX pricing, expect that approximate

our to smelter in we Our note XXXX. regional revised due the for shipments. sensitivities premium Please have Alumar our the been increase updated of that view distribution

and based fixed both is Brazil on in pricing index Our pricing.

for the we duty-unpaid high proxy using suggest see model. a the a of scheme, to As that that pricing for your correlation index index Midwest average and result

widely particularly the segments new whole the request unit a our are available, those per as cost per Australia a have measures Aluminum the for we in including Lastly, where of are Alumina disclosures disclosure unit and stockholders, appendix. now in reference. for we your At

to I'll turn Bill. Now back it

William Oplinger

Thanks, Molly.

in maintain pace fast XXXX. We our expect to

cover areas XXXX. in Let's key our focus of of some

attention direct Brazilian of We operational on of of our the approvals operational X and particular improving a step change stability. and Progressing progress We're performance last with system our and years Alcoa of safety. safety the continuing a more, operations. our want in paramount want by remains in see modernization great between Australia correlation the made excellence, we mining pursuit we in but importance. supported business the We've

innovation, raise targeted to plan areas inorganic for of the positioned product customers security for terms excellence customer-focused and the supplier expect We in and We pursue bar be opportunities. quality, to decisions. to as organic through growth We of want commercial sustainability, of on choice supply. via

deliver and to capital We the our will value returns that do of where exceed cost shareholders.

our progressing work expect Ciprián are We first execute and steps in XXXX. the to on San

capital and on Lastly, priority delevering for allocation, are a us. repositioning debt

further Assuming to prices their cash our believe enable means retain another stockholders. sufficient is strength, expect generate We delevering reductions. debt to deliver we value to to

markets. spot of in available the a cost Now market fourth force local inspections our alumina was all-time remained China. bauxite in all region let's high impacted to a the smelters, is in Northern production strong tight of In on relevant and Guinea, exports. bauxite creating the flow supply. market from prices alumina increasing lower quarter resulting tight in result that Chinese stocks demand China due discuss bauxite already and environmental of major mines majeure In safety particularly player reached a cargoes the a from the to exports the facing competition to Meanwhile, for lower-than-expected in alumina, smelters. supply at protest as to market, low This related an on in

availability to XXXX, in complete projects come India ramp-up balance, Also, to order keeping projects on bauxite back new planned. in alumina China, and key to ahead as India in refining Looking market and and to China Indonesia, the for several track. must is

European the remained In building fourth in packaging North and be and by Aluminum, while global electrical automotive construction demand sectors, to challenged. and American the supported resilient quarter. remain and continues demand

Europe demand are growth China, in aluminum construction, in XXXX. of likely and recovery. building In the building led to construction with the interest exception specifically, cuts primary end provide for prior uses in and support in growth U.S. all to rate For strong

in Russia, in the The supply. alumina spot exposed has Indonesia, price smelters at for smelter resulted increase Announced global together in smelters in with margins aluminum curtailments to in tightened and ramp-ups in outweighed price China, maintenance price. tighter front-loaded have delayed increase aluminum

following have growth outside Limited million demand And impact China in by recent supply supported and uncertainty China and lower on aluminum XXXX, to curtailments course, with any which approaching is by could to related North ton trade is U.S. year-over-year. effects rates expected is For cap. there supported metric tariffs, the new flows. real higher average of and interest the ramp-ups, incomes globally XX Europe demand capacity rebound, XXXX expected and America delayed of supply, wide-ranging

When possibility and of and competitive across Alcoa's trade integrated out we positioning point to cast to and it policy and refineries, conditions. houses maneuver to ability from a bauxite speak aluminum the of changing This vertically to located respond primary with aluminum Alcoa important the gives smelters player the alumina challenging advantage flows, market changing is mine mines, world. as and metal

to to mentioned I tight supply the cut to XXXX in caused some or ramp-ups. prices earlier, highs, smelters bauxite production delay in alumina alumina had rise As and all-time and

in while these the price; and Alcoa's smelters Canada Europe. close across in to us issues U.S., Our the of benefiting proximity global significant market to North conditions America network from with enabled Europe and alumina without operational refineries aluminum, elevated mines customers and navigate

customers aluminum security For close stable as variety appreciate transportation both alumina as and performance proximity, a products, comes Alcoa-sourced the products. that choices. mature well our and delivery with value our of reliable They

carbon itself our innovate on across low products to products meet chain solutions. the value prides needs, Alcoa to continuing customer and high-quality offering including

is was Section may Canada country another. other to the on When U.S. global U.S. primary primary current an currently on Currently, term, for impacts at who both Canada. one supply and United select flows can States, metal aluminum the imports first the of after Trump implemented his also how significant and by on This you to you its The in aluminum inflow the footprint has X/X the the true from and to by granted transition tariffs from flowing from significant look before Canada. U.S. discussions a into Alcoa's proposals from tariffs government see countries. XXX tariffs exemption aluminum have the President

Canadian aluminum were U.S., represent $X to customers. imports additional billion threat tariffs If current represent A U.S. U.S. Canadian volume the tariff this to export on be XX% annual $X.X could to of a cost there billion for to industrial U.S. competitiveness. would to on the

would transportation with and Mexico in costs U.S. specifically the particularly likely be In on end Canada automotive flows addition, increasing America, trade would Trade North market hurt chain, and supply largest the the market. like would imports import metal lower impacted that Canadian countries and reroute such Europe that the India, from a East countries. Middle and and aluminum to could while regions U.S. increase have duty level other

supply In Alcoa's our from smelters case, Canadian we Europe. could reroute to

to is in our have said, is like chains That them. advantage it a Alcoa's XXX-year-old is for worked all global certainly work which government While governments on this over a markets new history. optionality, implement U.S. the protect benefit supply not has Alcoa the operates with many throughout strategic world, topics company, tariffs and to and we to decides will the administration for our interests. an it purposes, If with customers

to Spain. Alcoa IGNIS work San regional just entered national long-term in further Inespal, Xunta complex. on announced our talk to the of the the have Ciprián outlook move Let's memorandum understanding a stakeholders. for and toward We cooperatively Spanish about progress with EQT, into work improving governments our

capital date; San capacity; support, support the meaningful investments are X our the be with that compensation smelter the the second, by will the a of elements the for energy production the Spanish dialogue achieve and the support provide prioritize are regional smelter when support deferred budget, compensation refinery. residue costs; government cooperation policies area energy which approval San maintain storage of authorization There the deploy projects, provide program national of first, to government to Ciprián key last, materially restarting competitive third, to COX the workers capital over by reaches to COX MOU, which in from Ciprián already include parties: we've projects the full seen renewable higher can needed increase which the later governments streamline

expect areas these as supply advancing as created MOU key including We by the of momentum well cooperation the use conditions, contracts. continue remaining the to to energy

to finalize Additionally, agreement. Alcoa and working partnership the are EQT IGNIS Inespal

to of steps early working are first in these We as the quarter XXXX. possible complete as

are As XXXX progress in have quarter made a we of fourth on proud the and we multiple fronts. company, the in

Looking the our execution stockholders. pace of fast a ahead, improve we key strategic competitiveness market of of focus to on to capitalize fundamentals areas operations, value plan to deliver maintain initiatives, and XXXX and our our on strong

Operator, the let's question-and-answer portion start session. the of

Operator

BMO Markets. is first with The Jancic question [Operator Capital Instructions] from Katja

Katja Jancic

tariffs, volume Bill, market. go do volume being directed if premium Where start somewhere mentioned actually the Midwest that would if and are there have Canada, from that do you attract divert on XX% Maybe still European could seeing else? potentially starting you volume would tariffs to to the you U.S. we think on

William Oplinger

a and back way us will and ships forth, ship suppliers North coming other a carrying metal higher. what potentially Yes, number exact will you'll go into don't differential. to same if substantially flows the from but end be substantially see premium, Europe. product a have doesn't passing in we to see Katja, higher Literally, we of into there's America Midwest non-Canadian most it of lot will going such volumes would because it attract front the that Eastern it Ultimately, a you're Canadian Canadian in Indian think, into you'd Atlantic and see there make in and disrupted a order in go XX% And the potentially will the metal on trade I metal, me Middle between metal U.S. up trade differential at, think sense. likely and

And shown why we've we so showed. that that's chart the

Katja Jancic

U.S. the from and tariffs? to would in be specifically, Alcoa enough your offset Midwest the then impact And just increase maybe operation negative for premium

William Oplinger

U.S. in versus the the of size So differential the Canada. size in the production remember of between production

metric in Canada metric XXX,XXX not roughly roughly so would tons the offset. tons, XXX,XXX We and in the have differential operating U.S.

Now before been speculate too we hasn't tariff structure much, the set.

the the the view government a then through we'll you wait point. time to taking think appreciative give been have and of brings of We tariffs. and And that U.S. at see what outlook these it

Operator

from is Lawson Winder of question next Securities. Bank The America with

Lawson Winder

I the And and to, when do Nice you see this Nice quarter. for capital about that I equity work but gauge ask Alcoa recent think you past, done sort feel your does Ma'aden it your some the on position. of in Alcoa? then on the might your during return. about the provide of view position a be timing net fall you into net solid target able sort to like I'd know coming some in clarity Bill, could, haven't the And that of in 'XX. If the debt potential factor you how try would to from point debt of consider to just to position might how I'm thinking? increase today,

Molly Beerman

debt net Lawson, the We part our I'll a longer first no stated take target. net on target. debt have

been are higher closed the the in net debt. we adjusted X we've than currently However, last year billion We at in $X.X years.

to certainly around was debt, net recall and more a in and back that you $X were for adjusted we If billion XXXX us. 'XX, right comfortable level

will any take. that our further for as capital we well need have cash funding well sheet We in strong operations look growth a and If XXXX. shareholder will that delevering excess we have after maintaining them, as we as at though, portfolio find, positioning our and repositioning our actions allocation framework, we'll look priority to debt as sustain at as returns, to we balance

William Oplinger

the it the X closed And when is that that anticipate year. half We're first billion. and roughly shares so years, on Subsequent The X value has the Ma'aden that to transaction, $X.X that closed getting X/X, it the X we of but on period it. that have more We very X/X, Recall Ma'aden we it transaction roughly the we've transaction closed. consider that lockup it's years. remember the this in increased like focused haven't $X.X important billion. time, a X/X, years, announced announced be of value will day we was to

recognize so that over with a is so those some we value. we'll there do And period, lockup time that what period, before we'll consider But we have potentially time shares.

Lawson Winder

are could from XXXX you it's warning that these the India very mean, helpful. of some is availability? a ramp some jump mean, I hearing If to what guess, alumina Okay, of a market. do just as to third-party terms capacity actually And you sense helpful. and bit I you bauxite refineries refineries, of, are I in commentary of your a and ramping these up. sufficient China, in have kind that in bauxite customers new provided there see It up? bauxite some I particularly sounded and of to

William Oplinger

very tonne, somewhere The China imported tonne. cost per bauxite We bauxite into bauxite's a is When and using alone probably see $XXX refinery market if they're coastal at bauxite, highest at tight. $XXX currently is been. $XXX ever China is pricing looking between the $XXX, their per restarting, bauxite in

think the alumina the is don't first tight happen believe, with market, So production that. coming that an the alumina market need look will And the the order market what on for we tight, the in half. pressures know at we market remain further. I market bauxite that loosen alumina for discussed up, expensive flow we alumina reasons a bauxite market, impact remarks. after on But through and online tight, has India, alumina see and prepared tight market. a to that it's Indonesia. to When in the that the we In we will

Operator

next is from Daniel The Major question with UBS.

Daniel Major

you hear okay? Can me

William Oplinger

do. we Yes,

Daniel Major

two Yes, questions. Great.

guess, Ciprián? year cash memorandum you with is at end of progress I cash? confirm but that at out a encouraging guess, memorandum it's a as first balance components. Ciprián. it? just Can of understanding, one San the good And updated on kind understanding, thinking couple The will effectively on San projection And the way market be it's reached. a of doesn't of of any it based of of when that the the will Is guarantee about prices I to the run deal what

Molly Beerman

balance. Yes, first part I'll on the the cash take

net cash still is consumption, has recently weekly. our reduced with depleting but prices, high So API cash it

proceed with sense the unions of urgency to and we items. and be certainty our our suppliers with based initial by Alcoa negotiations, made energy IGNIS, that each on the complete we the us partner, decision have remaining cash The release would of JV investments do of the on And primarily to for and be with the contracts. the viable formation and have discussions restricted on the a will so on that

William Oplinger

Both And as of far regional the plan materially they we of energy in as said, government Back compensation think They're MOU talked supportive of that step of important, is the area investments. over COX the we capital of the national the support. at XX, forward COX. uplift. With I continue a the That least are the the the goes, things, need we site. deal. December my supports doubling of the to the MOU higher supportive site. viability this They're can't their compensation But MOU smelter That's approval and projects, provides as ramp-up long-term the streamlining farms. on then it big X storage guaranteed. restart but renewable outlined wind in for viability residue lastly, long-term Daniel, essentially prioritizing the providing about the for a for smelter. point, for authorization be The support support not prepared remarks. specifically And of

reserved accelerate consumption must the of Molly key in about several that cash smelter pieces not that we of the earlier, production mentioned have will be proposed investment viable still to place. support the operations. is need to Currently, from fall ramping the so we that viability long-term the talked up As

from cash. We to Works also the Council need on releasing restricted the hear

restart the is step So smelter. doesn't the guarantee it a but MOU forward of the necessarily

Daniel Major

that excitement And monetizing of lots of potential upside the us to any then you capacity data excess Can numbers megawatts and question, any have and around around part energy provide AI the offtake there? Very dynamic. good. steer the feed of second excess around center with you

William Oplinger

have the positions And I that that world. You ownership part you're breaking X on the the have into the quarter in excess look around higher monetize depending we marketplace we benefit up do down the what in were us, we are in looks saw question That like energy We think the Brazil sell that's that asking some was what that hydros we will so in can but that quarter fourth essentially on fluctuate prices third positive. versus rainfall there. the down Brazil. and like the pricing energy a of

potentially could making plants, that energy is to coal-fired The smelting. monetize that monetize other the energy other But into place Warrick, currently, run in areas those and we using power than we're Warrick's could aluminum. really we it that the X are energy

Operator

question is with De Stanley. Morgan Alba from next The Carlos

Carlos de Alba

but assets? of similar data So given that vein sites a different, on of the idle the potentially slightly in is maybe question that to the from type last maybe monetize has what centers opportunity Alcoa interest

William Oplinger

value Thanks monetizing have question, And we for over the Carlos. actually a has generated significant history of legacy assets time. that

done actually may others while talk about we it, it. so have And

that, in sold certain Rockdale the able ago, $XXX we for I we sold it monetize And it site and after I for say data a center and this areas. was long million. $XXX before around you to remember That right able the make there. $XXX ultimately a craze into million that number good it around and that, redeveloped AI site, for of been million and Again, to advance went should has Intalco we developer. subsequently were were years if data Texas, So instance, In money. believe we centers, to monetize of

in. They take of uniquely are connections both positioned energy the the a positioned? around have energy to have that able around be Why AI number generally data bring advantage and are the situation. uniquely country say that the to world to and of We they're center able sites do I

places it in that's Henry, port. Point one is Australia. that's site we I when to probably So Point look Massena because is Wenatchee, which it, at a access has The most Comfort are have like East. the there valuable a Globally,

generation while not dollar our a craze million sales these of to So on sites. and real track I'm value it, AI centers the around from put data before multi-hundred willing you see record

Carlos de Alba

And timetable? you a follow-up Maybe there year the focused closing Alumina on were just on last obviously that is any Limited. one,

But Ciprián, color have agenda You months, making benefit? monetization you could process see quarters? to where have this progress assets effort. some as exactly company of the that's in and coming this San Any potentially for now in an ongoing in your we potential been do where the is legacy

William Oplinger

value. why these need time, say fire And take on do where position and the Carlos, assets. maximum in to reason of a is I not I sale things we a any no, these because No. want We're

had Rockdale as recollection of saga was, So value if that out recall offers and $XX Rockdale years million. held $XXX that ago, million, in my maximum the were for a you than from number as greater was again, we of small we

not a to lay out I'm timetable. So going

assets Point have that sites. of we're make like these the we case to sure get something We out In going through value going we maximum of that the Comfort, We're monetize. demolition. can

So we're not in now, sell market good it you let a is but right so a know. actually we'll rush to

Carlos de Alba

that, would would worst be case How that color a would the If useful. sort And a in out, country? Ciprián, these potentially going viable framework since question. restarting technically cash would San much agreement that you around range so may the Alcoa's shareholders? don't some cheat to all lose and maybe stranded enough. I'm that or If be play can ask for if bit Fair or what work, are asset don't a I one like money and you little into you provide of just efforts that was putting of Alcoa be the on reaching

William Oplinger

want will some So speculate gives you before outcome I I don't you on Molly caution potential numbers, here. the to Carlos, that

regional and significant site. national pleased from are focused government. that making a We really viable on San Ciprián both announced the we're We support the a with just

we outcome. That's So the that on priority our focused viable a for long are site making term.

around However, curtailment costs. numbers potential some give Molly can closure you or

Molly Beerman

So Carlos, remain time. updated these the the from haven't last They same.

On the closure we're smelter, $XX costs. to without million at million severance, $XX in looking cash

I area. go that out refinery, $XX would about storage or paying about we're And a now. $XXX actually CapEx the closure will spoke running the On X that funds there work That needed, to without does for the but just million closing. again, to whether be in scenario, We're but we're we and then ahead severance, about that years. include not we're residue million, do going X over be again, those

Operator

Nick Securities. next Riley B. from is question The Giles with

Nick Giles

date? a data on assets. approached have end to at conversations on up your hyperscalers Or like some to power quarter really just just is diligence here. Alcoa's wanted look you really stage? Have any I on nice What due by or follow developers? similar been legacy this Congrats of center

William Oplinger

changed able firms, Rockdale a so Nick, on a bit are developers some the have and be in with it do hyperscalers. sites. in through with all are of you and with time The constant work to these landscape it But historically, we go of done find little like And places lot these groups. of it. well-capitalized generally various of has that and takes money contact the out to they Intalco. don't that's not a we've lot process ultimately what But takes

our So with shareholders. in trying folks contact best for the we value are forward and move for to

Nick Giles

everyone will capitalized this say, think I target safe it's after night. to last be little Bill, a Well, announcement better

My you congratulations next the I an program. could the of on first your competitiveness improvement update wondering was question if was, program. execution on all, productivity provide profitability and of

exiting at had you about think reached still as think we Should of XQ QX. run rate? million I the you $XXX $XX million

Molly Beerman

$XXX actually into plan. we'll our put Yes. hit run all of initiatives productivity XXXX the have actions the all executed By that rate. to point, the million We

know and externally, accountable. you they're these like actually hold While profitability programs; hard to I internally, measure guys

plan. building So way, know of track and That it step accountable. can by our we we took by into of all improvements department operation, the our who's

going into down those we're feeling with about actions accounted locked in all the of and XXXX plan. good So

Nick Giles

of continued A luck. best

Operator

The is with Jefferies. LaFemina Chris next question from

Christopher LaFemina

monitor that you ask to hard that it's it's to improvement program. mentioned stuff for hard monitor on just CapEx, about Well, first, profitability Molly, but going to externally. was that to I us also internally.

get full in And $XXX you that imply total we implemented. before look you benefit spoke we assume program I there, at you if you like just program Kwinana was the you've So we would benefits. we $XXX work get get assume of from roughly that productivity about, the the in the the curtailment, benefit you did million million of and of and about delivered the assume full competitiveness what this XXXX benefit think full optimization, EBITDA

million price should environment. EBITDA, more mean So So effectively environment, being the than forward? we price it XXXX we program in of go like that be a $XXX that? in $X.X going if $XXX instead it's does that to more commodity that back way that of billion that would sort million, Is of about think terms modeling

Molly Beerman

side it. you're I of focus but kind the of saying, I Chris, hear what performance on

in initiatives the $XXX which bridge. of year-over-year market the see of at we've to million improvements you of $XXX if you you'll up that in the at have our the generated we've numbers showing productivity That's on of progress if on million. look that the chart in is that about your look the top listed that's appendix, made, the bridge, So 'XX back 'XX

about program. So other outside look to value-add lower related do you premiums deltas, headwinds we have and of $XXX when the costs $XX related at million product million headwinds about and the to inflation

have million. of $XXX apparent the we So very a net bridge in delivery that's over

William Oplinger

bridge, and right? that's the that beauty There's of And puts takes.

a bridge have improve continuously company, what the place up we We effort to getting. out ended exactly but massive spells the in

And so there. clear it and to the earnings, it's pretty bridges earnings

Christopher LaFemina

secondly And CapEx. helpful. That's then just on

cycle? think XXXX. nearly many the for what the CapEx it it's the that So And going is XXXX? and How it higher that of to where then than And guidance Bill, we is in bit And growth? is level sustaining CapEx XXXX in level? then a do CapEx Where had there's So about projects versus from that your a should How normalized aside your CapEx expected. more XXXX? it be to reverts be in normalized million about should probably $XXX are some mentioned to little kind substantial market after we up of XXXX lump contributing somewhere trends think that you XXXX. back through think I high big

Molly Beerman

components me in we XXXX, let expected if a There's guiding because that We this and in were changes to of bit. the But a you return did one. seeking. underspend think Chris, moving couple of sustaining So million CapEx. between take about $XXX

add going in to from the X million of we're million. it at related moves. to However, least we have been years mine million would $XX $XXX $XXX the up that guiding we next And thinking as

million for moves, it to As be 'XX can out, turns you X-ish on 'XX. will expect that complete, I elevated take we're but would number that years so be significant. in yet that, will time. during the $XX the we The mine adding don't have mine moves

Christopher LaFemina

Okay.

of might XXXX think, lot all said about million of that parts, where understand that to that's we $XXX spending. CapEx Is with even So right? other that the million increase, go there's one-off should think reverse kind you the, items mine to I I the expect of XXXX? $XXX moving XX% trying I a mean, in just you're

Molly Beerman

some now improve sustaining with our have CapEx we business. Yes, really opportunities to

If projects that we Juruti connecting energy there. going you an transition. them mentioned, We're the at look to the is through grid

new Australia. We ship expense. have Canada, And in a we in a significant also bauxite reclaimer going then in, that's unloader have Western

So it's the absolutely really business. opportunity improve to maybe we timing an now but have

into put are going And so we while available, business. to it the we have the cash

Operator

is from Michael Vertical Dudas question The Research. next with

Michael Dudas

from client demand the tariffs the like, what where forth you et recovery say, your in cetera, the forward we base sense here and share overall a front what's on outlook for outlook more the the aside, for, maybe the aluminum might you normalized move the Bill, are as regard and as volumes anticipating a seeing you be Like year, industry? cycle you're from to about XXXX with just year? cycle, put shipments, could

William Oplinger

little end of we're growth aluminum continue potentially, by start type That an to on at but bit rounding it you And on exact kind to are but upside. Then packaging. as world growth at look demand I numbers, the of actually demand X% these I'm end world we'll down me, gives rest in whether So forward that's alumina and X% briefly picture a of see and bauxite. the rest of let growth look roughly breaks China with at indication approximately of any just year-over-year we global we seeing. market, strength seeing around hit at demand world on from and X%. Rest roughly the market But X% action what aluminum, basis. we'll of growth is takes growth low, China me numbers China if see of strong. and stimulus. that a is we of pretty historically go we

The electrical bit continue see and space is demand automotive We strength to a in distribution. little conductor electrical mixed.

on weakness bit building were driver fairly demand lot for of interest be construction with rates. little the know And And based largest in Europe. is that interest would strength rates which weak. seeing will still building of what then and are We in North with in America a a I anticipating XXXX. is happens lower aluminum, and be construction, And people globally

unless it side. we looks it'll some a think be, average, offers demand the Just rates on from here. a go mathematics perspective, from And little lower higher potentially like upside bit on that

markets. So that's the

Michael Dudas

market how about we maybe see as how you here just think think from And indices, ready or anticipating? up. pretty sense speed to market, is as helpful, these follow a at a the very And you're you you Do of it, that Do the you're how dynamics rapidly they kind Bill. the be can That's do market since thinking of that base, then for this? we're expecting client getting happening the industry the administration? quickly new seem the breakneck to start adjust tariffs

William Oplinger

So of give a I'm a expecting. going bit nonanswer, you just because what it's to not of a little is there's and the around market clarity lot

You the frame to $X.XX gone $X.XX the Midwest look at something time in today. November, U.S., in from premium has it like December

have may it's is tariff. overall it It premium. anticipating some not type a be massive a type XX% in anticipating What That tariff? anticipating is would tariff. of Midwest of step-up some So it's

in couple we're and last because far They're over They a doing question just So were repositioning spot know. it's talking of same tariffs. what our not significant are our with the as that of do as our to the know commercial don't simply metal Molly customers, team and they customers I in. just necessarily days, don't

we'll to comes it. see So wait what of

quarters, as Midwest soon place, a over see time, differential. bump-up And tariff tariffs will, how is premium As then regions the metal will immediately tariffs metal in X if take as X what it it'll to quickly take go you flow of think far and other flow, for did time the I there the say, into as turn, a we that believe, out take, effect. we things will once will to

Canada a has about a and situation speaking rest where we're of tariff the world has tariff. the a So XX% XX%

but We the will the of let's half significant trade it flows see will course have of, impacts start say, immediately. year, over

Michael Dudas

was I appreciate a it. that Bill, great nonanswer.

William Oplinger

Thanks.

Operator

Wolfe Research. next is Tanners Timna The from with question

Timna Tanners

a paydown's or bit, in And the a debt allude know about expand I and Warrick some talked I Wanted to uses you've little talked Lista about opportunity past revisit to you expansions. cash, priority, but others. did know to you of

aluminum restart prices of is high to this Given Or kind decisions to in it you not to price, of really alumina do balance what environment? just matter a make need decide being or this compelling?

William Oplinger

So the question, thanks Timna. for

foremost The and first clarity the tariff we structure. is need some around

you big: assets, one we need anything clarity the do with we hit is And alumina that then Before Canadian assets prices. around or European or upon tariffs. U.S.

at at really can we in But alumina, sell there's consuming as factoring we reasonable especially an place support level. European So may Lista, if energy of a additional a can and capacity alumina cost $XXX in the place like a look today's turn a potential, that tonne. in prices Lista opportunity like get metal around at price we

we'll we as Those a we prices, alumina tariffs, factor make in clarity Lista that prices exchange we around and importantly, aluminum the determination, and capacity that always could energy excess around most X do, are prices, Warrick. restarted. rates, to get be the So places have once specifically

Timna Tanners

focus base on wasn't in detailed much you've presentation know touch far were there as initiatives use. some those in a CapEx I to emphasis on and in initiatives I the helpful. this also Okay, past, technology your the past. big wanted the of as

a they provide us? are you line can Would out be of update kind bit? Or any for for uses? in pushed So capital those

William Oplinger

ELYSIS. We to thinking XXX will the answers little insight Molly was it that XXX a of in the started in a XXXX. our deliver a question, numbers technology I in in cell do that into our before did start you bit of we kA not have So key cells anticipate want programs. ELYSIS XXXX kA around some disappointment XXXX, give X in

When any the we desktop-sized progress to that's from I but larger cell, look a stretch, at making really a Australia. much sized by are Australia, there. not cell anticipation gone we're So We've commercially in instance, Australia. the then in doing the that We're key And are electric up promising. for calcination, size at the refinery Alcoa cell in are Center. stepping side, making we technologies, that Technical on progress

to seeing we're have so can and usage apply emissions. at a how refineries it both And to that we and change our looking existing technology step energy carbon in

the to So do address want you dollar question? Molly,

Molly Beerman

not $XX have dollars. handy million. do it's we recall around but don't significant Timna, Yes. technology rate I Australia-specific have the

William Oplinger

And ELYSIS?

Molly Beerman

ELYSIS No CapEx.

Operator

next with The JPMorgan. question from Bill is Peterson

Bennett Moore

forward? is circle moving the could Ciprián Bennett bottleneck this I a workforce JV. proposed the This and all union for has on back been Bill. at Is If to regarding and the feedback quick, San from MOU what real wondering

William Oplinger

and But in are things certain it, is into to the characterized fresh, we MOU. so So meetings informed I I said, of discussion need them smelter. place guarantee national for balanced also as The we there but really very support MOU, had is governments. the regional are still step that that the in a to the around right? restart from come with the the real have as the MOU, MOU employees of being our forward in And the order and we us

that had this with that's So us our employees point. at the heard we've and the they've from communication directly unions. with And that

Bennett Moore

permitting should for on Australia, after that? public in has next we Western then watch milestones are comment the begun? period that And And what

William Oplinger

Molly. ahead, Go

Molly Beerman

earlier quarter to we upgraded on in track than At go quarter. of bauxite second So move this the period, comment first and commence for XXXX, our then the end the access to towards we're into expect public approvals the still and and mine the the no point, 'XX.

Bennett Moore

Congrats great quarter. on the

William Oplinger

Thank you.

Molly Beerman

you. Thank

Operator

back Mr. session. This remarks. over question-and-answer conference our would concludes Oplinger to his closing for like to I the turn

William Oplinger

we to Thanks, and joining in Gary, forward all, further our Thank sharing you, for look call. thank you. when speak April. progress again I Molly and

Operator

presentation. you has conference attending now concluded. The for today's Thank

disconnect. now You may

Alcoa (AA) 22 Jan 252024 Q4 Earnings call transcript