Citing 7% growth from global car manufacturing and aerospace industries, top U.S. aluminum producer Alcoa Inc. announced strong Q4 profits and 2014 returns at their highest since 2008, amid major restructuring. Q4 revenue was $6.4 billion, a 14% year-on-year increase, officials reported; last year’s operating income was $268 million, a high since a $2.3 billion net loss six years ago.
Alcoa enjoyed robust aluminum and alumina prices, a strong dollar, and record automotive shipments, according to New York-based officials. “We gained across markets,” CEO Klaus Kleinfeld said, “hard work continues to pay off;” Q4’s $273 million restructuring included smelter closures amid a 22% capacity reduction since 2013, while Q4 net income stood at $432 million, a $40 million year-on-year increase.
Alcoa’s $2.85 billion acquisition of jet engine part producer Firth Rixson Ltd. in Q4, its biggest in 16 years, brought a $1.6 billion revenue increase, added Alcoa representatives, while allowing exposure to nickel-based alloys and titanium part production. Purchases, officials added, also included Germany’s TITAL GmbH pending Q1 2015, to simultaneously grow a titanium aerospace portfolio with 70% in forecast revenue by 2019.
Annual production savings of $1.2 billion, officials added, included progress on a Saudi Arabia joint venture (JV) in which a $91 million investment exceeded 2014’s $125 million target, said Alcoa. By Q4, the Ma’aden-Alcoa JV refinery produced first alumina from Saudi bauxite; annual operating costs totaled $1.7 billion, with record Q4 operational cash costs totaling $1.5 billion.