Alcoa Corp. (AA) reported second-quarter EBITDA exceeding $900 million and provided further detail on the financial impact of its planned Ally Group acquisition during a presentation at the Jefferies Global Industrials Conference on Thursday.
CFO Molly Beerman said the company is carrying strong momentum from the second quarter into the third as it approaches its 10th anniversary as a standalone business.
Alcoa issued $2.6 billion in debt to help fund the Ally Group purchase. On a pro forma basis, adjusted net debt would rise to approximately $4.7 billion against pro forma EBITDA of roughly $3.2 billion. Beerman noted that Alcoa’s current adjusted net debt target of $1.0 billion to $1.5 billion will be revised upward once the acquisition closes.
The transaction is expected to close in the second half of 2027. Alcoa estimates $900 million in net present value synergies from the deal, including about $50 million annually in near-term procurement, logistics and commercial benefits within the first 12 months—roughly 30% of total synergy value. Life-of-asset mine planning accounts for the remaining 40%, Beerman said.
Capital expenditures are guided at $750 million for 2026, rising to $800 million per year over the following three years before stepping back to $750 million. The Ally Group acquisition will add $350 million to $450 million annually to that guidance.
Alcoa also reaffirmed its transformation asset-sales program, targeting $500 million to $1 billion in proceeds by 2027 from approximately 10 closed assets.
On the operations side, Alcoa achieved production records at five facilities and brought about 30,000 metric tons of smelting capacity back online across its San Ciprian smelter in Spain, Alumar in Brazil, Lista in Norway and Portland in Australia. Value-add product output rose by roughly 25,000 tons in the quarter.
Power costs remain well-covered: 99% of electricity needs are locked into long-term fixed contracts or self-generation, with only the Norwegian operation exposed. Alcoa secured a new 10-year power contract for its Massena smelter in New York, including two five-year renewal options and fully renewable energy.
The alumina market remains under pressure, with prices around $350 per metric ton. A surplus is expected to persist through 2026 and into 2027 until Indonesian smelters absorb more supply. Alcoa plans a 40% curtailment at its Yarwun smelter in Australia starting in October 2026.
Tariff exposure is significant. Alcoa said 900,000 Canadian tons of aluminum face a 50% tariff, creating more than $1 billion in annual costs. A reduction to 25% would cut those costs by approximately $500 million yearly.
"Alcoa is in a fortunate and unique position in that we can benefit almost from any of the trade proposals that are currently open," Beerman said.
Alcoa also held a $1.6 billion stake in Ma'aden, the monetization of which is scheduled to begin at one-third per year starting in 2028. A six-month permitting contingency period for Australian operations runs through mid-2027.
