Jan. 23, 2013
Alcoa Ends Year Strong, Forecasts 7 Percent Growth in 2013
Alcoa, New York, reported net income of $191 million on total revenues of $23.7 billion in 2012, down from income of $611 million on revenues of $25 billion in 2011. Fourth-quarter 2012 net income from continuing operations of $242 million showed a significant improvement from the loss of $143 million in third-quarter 2012, and a loss of $191 million in fourth-quarter 2011. Revenue for the fourth quarter totaled $5.9 billion, up 1 percent compared with third-quarter 2012, but down 2 percent compared with fourth-quarter 2011.
Year-on-year, the realized aluminum price fell 12 percent, equating to roughly $1 billion in market impact, the company noted in its quarterly report to analysts and investors last month. Despite low aluminum prices, Alcoa generated full-year income and met all of its cash sustainability targets for the fourth consecutive year. The company claims it delivered $1.3 billion in productivity and overhead improvements, reduced days working capital by three days, and ended the year in a strong liquidity position with net debt at its lowest level since 2006 and $1.9 billion cash on hand.
"Alcoa hit record profitability in our mid and downstream businesses, and continued to drive efficiency in our upstream businesses in the fourth quarter, all while cutting debt and maintaining our cash position," said Klaus Kleinfeld, Alcoa chairman and CEO. "We overcame volatile metal prices and global economic instability to deliver on our targets for the fourth year in a row. We enter 2013 in a strong position to maximize profitable growth."
In 2013, Alcoa predicts global aluminum demand growth of 7 percent, up from 6 percent in 2012 and ahead of the 6.5 percent rate required to meet the company's forecast of a doubling in global aluminum demand between 2010 and 2020. Aluminum demand grew 10 percent in 2011 on top of 13 percent growth in 2010. By market segment, Alcoa projects global growth this year of 9-10 percent in aerospace, 1-4 percent in automotive, 2-7 percent in commercial transportation, 2-3 percent in packaging, 4-5 percent in building and construction, and 3-5 percent in industrial gas turbines.
Alcoa has now completed its planned closure or curtailment of 531,000 metric tons, or 12 percent, of its highest-cost smelting capacity, further improving its competitive position, executives said.