Alcoa Corporation (NYSE:AA) Q2 2019 Earnings Conference Call - Final Transcript
Jul 17, 2019 • 05:00 pm ET
Roy C. Harvey
serious injuries defined as life ending or life-altering. Both employees are now focused on rehabilitation and recovery. Still these incidents underscore the importance and urgency of our work to further strengthen our safety programs. Safety remains our most important goal, ensuring that everyone who walks through our doors goes home safe and sound. We also made real progress this quarter on a number of portfolio strengthening initiatives. We amended our Ma'aden joint venture agreement and divested our minority interest in the rolling mill. The exit reduces operating losses and simplifies our business in Saudi Arabia. Our interests in the remaining portion of the Ma'aden joint venture remain the same.
In our aluminum portfolio in Quebec, we reached two competitive six year labor contracts. The first at Baie Comeau and the second at Becancour. The contract at Becancour ends an 18 month lockout at the smelter and the process to fully restart idle capacity gets underway later this month. Also in Quebec, we are implementing plans to increase the production capacity at Deschambault, one of the lowest cost smelters in the Alcoa system. The Canadian government will offset some costs for the project expected to be complete in 2021.
In Spain, we made significant progress toward removing historically uncompetitive capacity from our aluminum portfolio. Earlier this month, we signed a conditional agreement with a private equity investment firm to divest the Alcoa Aviles and La Coruna plants.
Lastly, turning to markets, while we are reducing our estimate for global aluminum demand growth. We continue to project a global aluminum deficit for the year. We also see aluminum inventory trending lower and other reasons for optimism.
With that, I'll turn it over to Bill for a detailed review of our second quarter results.
William F. Oplinger
Thanks, Roy. Let's start with the income statement. Revenues were flat sequentially as higher volumes and energy revenues were more than offset by lower realized prices for alumina and aluminum. Revenues declined $868 million year-on-year, primarily on lower alumina and aluminum prices. In the quarter, restructuring charges drove the net loss attributable to Alcoa Corporation to $402 million or $2.17 per share on a 185.5 million shares outstanding. Special items totaled $400 million after tax and non-controlling interest of that amount cost related to the MRC divestiture were $319 million, also included is a charge of $38 million related to the pension benefit plan offered at Baie Comeau, Quebec as part of the new labor agreement. We did not take a charge related to our Aviles and La Coruna smelters this quarter as we did not sign the conditional divestiture agreement until July 5. We expect that charge ranging from $100 million to $140 million depending on the outcome of the process to occur in the third quarter.
Now, let's look at the income statement excluding special items. Our second quarter adjusted net loss, excluding special items was $2 million or $0.01 per share, improving $41 million sequentially. Adjusted EBITDA, excluding special items was $455 million, down $12 million