CHICAGO Alcoa Inc. logged a first-quarter net loss of $178 million on low aluminum prices and costs related to plant closures.
The Pittsburgh-based aluminum producers red ink was in contrast to net income of $149 million in the same period last year as sales fell 6.5 percent in the same comparison.
The loss came as aluminum prices fell 8 percent year over year and as the company took a $276-million hit largely related to smelter and rolling mill capacity reductions, Alcoa said in its earnings report April 8.
Closures include two rolling mills in Australia expected to be shuttered by the end of the year. The mills serve the Australian and Asian can sheet markets, which have been hampered by overcapacity, the company said.
Those shutdowns come after the company announced plans to halt smelting aluminum at its first plant in Brazil and will further cut production at another smelter by May (amm.com, March 28), permanently shut its Point Henry aluminum smelter in Australia by August (amm.com, Feb. 18) and demolish two remaining potlines at its Massena East smelter in New York (amm.com, Jan. 22).
Alcoa said it will have slashed its operating smelting capacity to 1.2 million tonnes per year after the announced production cuts and closures have been completed, reducing its capacity by 28 percent since 2007.
"Our transformation is acceleratingwere powering growth in our value-add businesses and aggressively reshaping our commodity business," Alcoa chairman and chief executive officer Klaus Kleinfeld said in
Alcoa predicted that added capacity at new facilities in Iowa and Tennessee would boost auto sheet revenue sixfold from 2013 levels to more than $1.3 billion by 2018. The company also boosted its 2014 outlook for global aerospace growth demand.
Alcoa said its $300-million Davenport, Iowa, rolling mill (amm.com, Jan. 14) is now fully operational as the company looks to take advantage of increased automotive demand for aluminum. In addition, Alcoa said it continues to make progress on its automotive expansion at its facility in Alcoa, Tenn., expected to be completed by mid-2015 (amm.com, May 2).
Alcoas joint venture with Saudi Arabian Mining Co. (Maaden) is expected to produce its first auto coil in the fourth quarter, the company said. Alcoa is boosting automotive capacity at its joint venture with Maaden in Saudi Arabia (amm.com, Dec. 12, 2012), an expansion slated to be finished by the end of 2014.