Alumina has posted a US$122m net profit after tax for 1H15, representing a US$169m increase in profit over 1H14. The improvement in profit was driven by a significantly higher alumina EBITDA margin and strong cash generation despite the recent falls in commodity prices. The company’s gearing level continues to remain very low at 2.8%
Alumina Limited owns 40% of Alcoa World Alumina and Chemicals (AWAC), the world’s largest alumina business. Alumina’s partner, Alcoa Inc, owns the remaining 60% and provides the operating management of AWAC. Alumina’s credit profile is critically dependent on the dividend stream paid to it by AWAC to service its debt. As such we provide some of the key highlights of both Alumina’s and AWAC’s performance.
Despite the recent fall commodity prices, Alumina expects to see solid margins continue in 2H15 due to increased sales and lower production costs resulting from favourable exchange rates.
Key points:
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Alumina’s 1H15 net profit after tax of US$122m represents a substantial improvement from the US$47m loss in the prior corresponding half-yearly period
- Improvements in Alumina net debt of US$65.8m and gearing of 2.8% versus 31 December 2014 (US$86.6m and 3.4% respectively)
- AWAC posted one of its best results for several half year periods. EBITDA increased by US$611m to US$730m, driven by increased profitability in alumina production. The average realised price of alumina increased by US$21/tonne to US$321/tonne, while the cost of alumina production decreased by US$30/t to US$223/t
- The 1H15 EBITDA margin for alumina of US$104/t is the highest EBITDA margin since 2007
Please contact your FIIG representative for more information on the Alumina bond available to FIIG investors.