Alcoa Anticipated to Return to Profitability in 2024 After Challenging Year
Alcoa, a leading multinational in the aluminum industry, is projected to bounce back to profitability in 2024 following a significant loss in 2023. According to the consensus among 13 investment analysts, the Pittsburgh-based company is expected to end the year with a net profit of $54.2 million (approximately 51 million euros), marking a notable recovery from the nearly 600 million euros in losses recorded last year.
The anticipated turnaround comes after a tough period characterized by rising energy and raw material costs, which significantly impacted Alcoa's operations. The company's San Cibrao plant, which faced operational shutdowns last year, resumed activity in January 2024. This restart involved progressively reactivating vats, with the full schedule set to be operational by April.
However, the financial strain remains a concern for Alcoa. During the fourth-quarter results presentation, Bill Oplinger, the president of Alcoa, highlighted the potential exhaustion of available funds by the second half of 2024 if the situation at the San Cibrao plant does not improve significantly. The plant is currently not considered viable, prompting Alcoa to reconsider its operational strategies and even explore the sale of the complex.
Despite these challenges, the first quarter of 2024 still shows a forecasted loss of $77.3 million (about 72.8 million euros), but expectations suggest a positive shift in the financial trajectory from the second quarter onwards. Analysts predict a modest profit of 3 million euros for April through June, escalating to 45.5 million euros in the third quarter and reaching 63.5 million euros in the final quarter of the year.
Alcoa’s strategy includes modifying the viability agreement with unions and initiating discussions with potential buyers, aiming to secure the plant’s future and ensure financial stability. The company is set to start receiving binding offers by June, aligning with its forecasted financial recovery.
