Alumina's 2023 full-year results and proposed acquisition

Alumina Limited (ASX: $AWC) reported a net loss after tax of US$150m for the full year ended 31 December 2023, compared to a net profit after tax of $104m in 2022. The company did not declare a final dividend. Additionally, Alumina has received a non-binding, indicative and conditional proposal from Alcoa Corporation to acquire 100% of the ordinary shares on issue in Alumina via a scheme of arrangement, for a scrip consideration of 0.02854 shares of Alcoa common stock for each Alumina share.

Executive commentary on financial performance and acquisition proposal

2023 was a challenging year for AWAC, with lower production volumes, higher production costs, and a lower realised price for alumina. Despite the disappointing results, AWAC has achieved significant milestones, including mine plan approvals in WA and actions to improve financial performance. The decision to curtail the Kwinana refinery and initiate further action at the San Ciprian refinery in Spain are aimed at improving profitability and creating a higher quality refinery portfolio. The proposed acquisition by Alcoa Corporation represents a strategic and financial opportunity for Alumina shareholders, subject to negotiation and execution of mutually satisfactory definitive transaction documentation.

Summary of Alumina's 2023 performance and outlook

Alumina reported a net loss after tax of US$150m for the full year 2023, attributed to lower production volumes, higher production costs, and a lower realised price for alumina. The company did not declare a final dividend and is considering a non-binding acquisition proposal from Alcoa Corporation. The proposed transaction aims to unify the ownership of AWAC and offers strategic and financial benefits to Alumina shareholders. Looking ahead, the company aims to focus on profitability improvement and create a higher quality refinery portfolio. The alumina market outside China continues to be tightly balanced, with the company expecting a more pronounced tight balance following the curtailment of Kwinana in the second quarter of 2024.