SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT ON FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
Date: Period
August 22, 2014
ALUMINA
LIMITED
ACN 004 820 419
Level 12, IBM
Centre
60 City Road
Southbank, Victoria 3006
Australia
Indicate by check mark whether
the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form
20-F x Form 40-F ¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No
x
If Yes is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
This report on Form 6-K includes press releases of Alumina Limited made during the period April 23, 2014 to,
August 21 2014.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorised.
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ALUMINA LIMITED |
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By: |
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/s/ Stephen Foster |
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Name: |
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Stephen Foster |
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Title: |
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Company Secretary |
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Date: |
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August 22, 2014 |
ALUMINA LIMITED
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ASX Announcement |
|
21 August 2014 |
Alumina Limited 2014 Half-Year Result
Attached are the following documents in relation to Alumina Limiteds Half-Year Results for the six months ended 30 June 2014:
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|
June 2014 Half-Year ASX Report |
|
/s/ Stephen Foster |
Stephen Foster |
Company Secretary |
ALUMINA LIMITED
21 August 2014
Alumina Limited 2014 Half-Year Result
Alumina Limited key financials
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Net loss after tax of $47.4 million |
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Net profit after tax of $26.8 million excluding significant items of $74.21 million, which included Point Henry restructuring charges |
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Net debt reduced to $130.0 million and gearing to 4.3%2 |
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No interim dividend declared |
AWAC key financials
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Average realised third party smelter grade alumina prices down 5.1% |
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EBITDA margin for alumina3 of $44 per tonne (1H13: $45 per tonne) |
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EBITDA4 of $345.6 million excluding significant items of $226.41 million, which included Point Henry
restructuring charges |
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AWAC distributions to Alumina Limited of $54.2 million during the half and $65.7 million year to date |
Outlook
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Maaden due to come on stream in 4Q 2014, refinery approximately 95% complete and mine approximately 70% complete |
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Approximately 65% of AWACs 2014 third party smelter grade alumina shipments to be on spot or index basis |
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AWAC focusing on achieving further productivity and supply chain improvements |
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AWACs sustaining and growth capex forecast to be approximately $270.0 million |
Alumina Limited Key Financials
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1H14 |
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2H13 |
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1H13 |
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US$m |
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|
US$m |
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|
US$m |
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|
|
Net (loss)/profit after tax |
|
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(47.4 |
) |
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2.9 |
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|
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(2.4 |
) |
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Total significant items after tax1 |
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(74.2 |
) |
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9.9 |
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|
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(39.0 |
) |
|
|
|
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Net profit/(loss) after tax excluding significant items |
|
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26.8 |
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|
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(7.0 |
) |
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36.6 |
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|
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Cash received from AWAC |
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54.2 |
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81.4 |
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28.9 |
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Net Debt |
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130.0 |
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135.2 |
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197.2 |
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|
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Gearing (%)2 |
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4.3 |
% |
|
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4.6 |
% |
|
|
6.3 |
% |
AWAC Key Financials (US GAAP)
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1H14 |
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2H13 |
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1H13 |
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US$m |
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US$m |
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US$m |
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Total Revenue |
|
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2,798.9 |
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2,919.7 |
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2,964.9 |
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COGS and operating expenses |
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(2,396.5 |
) |
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(2,507.3 |
) |
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(2,581.6 |
) |
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EBITDA4 |
|
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119.2 |
|
|
|
39.0 |
|
|
|
229.8 |
|
|
|
|
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Total significant items before tax1 |
|
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(226.4 |
) |
|
|
(324.0 |
) |
|
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(135.0 |
) |
|
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|
|
EBITDA excluding significant items |
|
|
345.6 |
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|
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363.0 |
|
|
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364.8 |
|
|
|
|
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Cash dividends, distributions and capital returns |
|
|
136.7 |
|
|
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198.5 |
|
|
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72.2 |
|
Alumina Limited today announced a net loss
after tax of $47.4 million, compared to a loss of $2.4 million for the first half of last year.
Alumina Limited Chief Executive Officer, Peter
Wasow, said, Alumina Limiteds net loss occurred due to significant charges incurred during the half, including costs associated with the closure of the Point Henry smelter as announced by Alcoa of Australia Limited on 18 February
2014. Excluding these charges, the Company would have reported a net profit of $26.8 million.
The AWAC joint venture maintained cost control and achieved ongoing net productivity gains against a
backdrop of continued weakness in alumina pricing. AWACs EBITDA margins3 for alumina were $44 per tonne, just $1 per tonne lower than the first half of last year despite weaker
alumina prices.
AWACs strategic initiatives to improve margins are on track. The Maaden refinery is now approximately 95% complete and
whilst the mine is approximately 70% complete, it has already begun operations providing feed stock to the refinery. The first alumina from the refinery is due in the fourth quarter of this year.
During the half, the transition toward spot or index pricing for alumina continued with approximately 63% of third party smelter grade alumina shipments
priced on spot or an alumina indexed basis.
Up to 30 June 2014, Alumina Limited has received $54.2 million capital returns and distributions
from AWAC. Since 30 June, Alumina Limited has received an additional $11.5 million capital returns from AWAC.
Despite challenging market
conditions, Aluminas balance sheet remained very strong with gearing of just 4.3% and the company remains well positioned for any industry upturn.
Definitions and notes
1. |
Details of the significant items for each of the periods are set out on page 23 of the 2014 Half-Year Report. |
2. |
Calculated as (debt - cash) / (debt + equity). |
3. |
EBITDA margin is calculated as AWACs EBITDA excluding significant items, smelters operating results and equity accounted income/(losses) divided by tonnes produced. |
4. |
Earnings before interest, tax, depreciation and amortisation consistent with previous periods. |
Some
statements in this public announcement are forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements also include those containing such words as anticipate,
estimates, should, will, expects, plans or similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual outcomes to be different from the
forward-looking statements. Important factors that could cause actual results to differ from the forward looking statements include: (a) material adverse changes in global economic, alumina or aluminium industry conditions and the markets
served by AWAC; (b) changes in production and development costs and production levels or to sales agreements; (c) changes in laws or regulations or policies; (d) changes in alumina and aluminium prices and currency exchange rates; and
(e) the other risk factors summarised in Aluminas Form 20-F for the year ended 31 December 2013.
This public announcement contains
certain non-IFRS financial information. This information is presented to assist in making appropriate comparisons with prior year and to assess the operating performance of the business. Where non-IFRS measures are used, definition of the measure,
calculation method and/or reconciliation to IFRS financial information is provided as appropriate.
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Investor Contacts: |
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Media Contact: |
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Chris Thiris, CFO |
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Nerida Mossop, Hinton & Associates |
+613 8699 2607 |
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+613 9600 1979 / +61 437 361 433 |
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Charles Smitheram |
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+613 8699 2613 |
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ASX HALF-YEAR REPORT
ALUMINA LIMITED
ABN 85
004 820 419
30 June 2014
Lodged with the ASX under Listing Rule 4.2A.
This information should be read in conjunction with the 31 December 2013 Annual Report.
This half-year report covers the consolidated entity consisting of Alumina Limited and its controlled entities. The
financial statements are presented in United States dollars (unless otherwise stated).
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
Results for Announcement to the Market
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Change |
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US$ million |
|
Net (loss)/profit from ordinary activities after tax attributable to members of Alumina Limited |
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Up |
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1,875 |
% |
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(47.4 |
) |
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Net (loss)/profit for the period attributable to members of Alumina Limited |
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Up |
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1,875 |
% |
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(47.4 |
) |
Dividends
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Amount per share US cents |
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Franked amount per share US cents |
Final dividend (prior year) |
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Nil |
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n/a |
Interim dividend |
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Nil |
|
n/a |
Significant items affecting the net (loss)/profit for the period
The Companys net (loss)/profit was negatively affected by individually significant items. These items are disclosed in the table below to enhance an
understanding of the Companys operational performance during the reporting period.
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Net (loss)/profit for the period, after tax |
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Half-Year ended 30 June 2014 US$ million (47.4) |
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Half-Year ended 31 Dec 2013 US$ million 2.9 |
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Half-Year ended 30 June 2013 US$ million (2.4) |
|
Significant items included in net (loss)/profit: |
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Legal matters of Associate1 |
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(2.7 |
) |
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13.5 |
|
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(30.0 |
) |
Point Henry restructuring charges2 |
|
|
(78.7 |
) |
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Other3 |
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7.2 |
|
|
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(3.6 |
) |
|
|
(9.0 |
) |
1 |
Alba Civil Settlement and Government Investigations are legal matters that commenced in February 2008 and were concluded in January 2014. The impact of these
legal matters was reflected as progress in their resolution was made. |
2 |
On 18 February 2014 Alcoa of Australia Limited, an AWAC entity, decided to permanently close the Point Henry aluminium smelter which was done in August 2014.
Further costs will be recognised in 2014 and future financial years relating to the closure, demolition and remediation activities that are expected to be completed by the end of 2018. |
3 |
Other significant items include the gain on the sale of a gold mining interest in Suriname, asset write-offs and the impact of Anglesea power station statutory
maintenance for the six month periods ended 30 June 2014, 31 December 2013 and 30 June 2013 respectively. |
This
half-yearly report should be read in conjunction with the most recent annual financial report.
7
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
Directors Report
The Directors of Alumina Limited
present their report on the consolidated entity consisting of Alumina Limited and the entities it controlled (the Group) at the end of, or during, the half-year ended 30 June 2014.
DIRECTORS
The following persons were directors of
Alumina Limited during the whole of the half-year and up to the date of this report, unless otherwise indicated:
Non-executive
G J Pizzey (Chairman)
E R Stein
C Zeng
W P Day (appointed 1 January 2014)
M Ferraro (appointed 5 February 2014)
Executive
P C Wasow (Chief Executive Officer)
PRINCIPAL
ACTIVITIES
The principal activities of the Group relate to its 40 per cent interest in the series of operating entities forming the Alcoa World
Alumina and Chemical (AWAC) joint venture. AWAC has interests in bauxite mining, alumina refining, and aluminium smelting. There have been no significant changes in the nature of these activities.
REVIEW OF OPERATIONS
The half-year financial results of
Alumina Limited include the half-year result of AWAC and associated corporate activities.
The Groups half-year net loss after tax attributable to
members of Alumina Limited was US$47.4 million (1H 2013: US$2.4 million loss).
For further information on the operations of the Group during the
half-year ended 30 June 2014 and the results of these operations, refer to pages 17-23.
AUDITORS INDEPENDENCE DECLARATION
A copy of the Auditors independence declaration as required under section 307C of the Corporations Act is set out on page 4.
ROUNDING OF AMOUNTS
The Company is of a kind referred to
in the Australian Securities and Investments Commission Class Order 98/100, relating to the rounding off of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the
nearest hundred thousand dollars, except where otherwise required.
This Report is made in accordance with a resolution of directors.
Peter Wasow
Director
Melbourne
21 August 2014
8
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
Auditors Independence Declaration
As lead auditor for the review of Alumina Limited for the half-year ended 30 June 2014, I declare that to the best of my knowledge and
belief, there have been:
|
a) |
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and |
|
b) |
no contraventions of any applicable code of professional conduct in relation to the review. |
This declaration is in respect of Alumina Limited and the entities it controlled during the period.
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Nadia Carlin |
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Melbourne |
Partner |
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21 August 2014 |
PricewaterhouseCoopers |
|
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PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
9
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
Consolidated Statement of Profit or Loss and Other Comprehensive Income
|
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Half-Year ended 30 June 2014 |
|
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Half-Year ended 31 Dec 2013 |
|
|
Half-Year ended 30 June 2013 |
|
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US$ million |
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|
US$ million |
|
|
US$ million |
|
Revenue from continuing operations |
|
|
|
|
|
|
0.1 |
|
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|
0.2 |
|
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Other income |
|
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|
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137.1 |
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
(6.4 |
) |
|
|
(9.6 |
) |
|
|
(7.6 |
) |
|
|
|
|
Change in fair value of derivatives/foreign exchange (losses)/gains |
|
|
(0.3 |
) |
|
|
1.8 |
|
|
|
1.2 |
|
|
|
|
|
Finance costs |
|
|
(6.9 |
) |
|
|
(13.8 |
) |
|
|
(11.5 |
) |
|
|
|
|
Share of net (loss)/profit of associates accounted for using the equity method |
|
|
(30.7 |
) |
|
|
(112.7 |
) |
|
|
15.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit before income tax |
|
|
(44.3 |
) |
|
|
2.9 |
|
|
|
(2.4 |
) |
|
|
|
|
Income tax expense from continuing operations |
|
|
(3.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit for the half-year |
|
|
(47.4 |
) |
|
|
2.9 |
|
|
|
(2.4 |
) |
|
|
|
|
Other comprehensive income/(loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be reclassified to profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of reserve movements accounted for using the equity method |
|
|
4.4 |
|
|
|
3.3 |
|
|
|
(0.3 |
) |
|
|
|
|
Foreign exchange translation difference |
|
|
132.8 |
|
|
|
(144.0 |
) |
|
|
(229.1 |
) |
|
|
|
|
Items that will not be reclassified to profit or loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Re-measurements of retirement benefit obligations accounted for using the equity method |
|
|
(6.1 |
) |
|
|
31.7 |
|
|
|
36.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income/(loss) for the half-year, net of tax |
|
|
131.1 |
|
|
|
(109.0 |
) |
|
|
(193.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income/(loss) for the half-year attributable to the owners of Alumina Limited |
|
|
83.7 |
|
|
|
(106.1 |
) |
|
|
(195.8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share (EPS)
|
|
|
|
|
|
|
|
|
Half-Year ended 30 June 2014 |
|
Half-Year ended 31 Dec 2013 |
|
Half-Year ended 30 June 2013 |
|
|
US cents |
|
US cents |
|
US cents |
Basic EPS |
|
Negative 1.7 |
|
Positive 0.12 |
|
Negative 0.1 |
Diluted EPS |
|
Negative 1.7 |
|
Positive 0.12 |
|
Negative 0.1 |
10
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
Consolidated Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June 2014 US$ million |
|
|
31 December 2013 US$ million |
|
|
30 June 2013 US$ million |
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
5.0 |
|
|
|
24.0 |
|
|
|
23.8 |
|
Receivables |
|
|
0.1 |
|
|
|
0.1 |
|
|
|
25.0 |
|
Other assets |
|
|
23.2 |
|
|
|
23.7 |
|
|
|
3.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
28.3 |
|
|
|
47.8 |
|
|
|
52.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates |
|
|
2,877.2 |
|
|
|
2,798.9 |
|
|
|
3,076.8 |
|
Property, plant and equipment |
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.2 |
|
Other assets |
|
|
117.1 |
|
|
|
117.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets |
|
|
2,994.4 |
|
|
|
2,916.2 |
|
|
|
3,077.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
3,022.7 |
|
|
|
2,964.0 |
|
|
|
3,129.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Payables |
|
|
1.5 |
|
|
|
3.9 |
|
|
|
1.5 |
|
Interest bearing liabilities |
|
|
51.2 |
|
|
|
50.6 |
|
|
|
116.1 |
|
Derivative financial instruments |
|
|
5.0 |
|
|
|
6.4 |
|
|
|
6.6 |
|
Provisions |
|
|
0.3 |
|
|
|
0.3 |
|
|
|
0.2 |
|
Deferred tax liabilities |
|
|
0.4 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
0.2 |
|
|
|
0.2 |
|
|
|
0.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
58.6 |
|
|
|
61.4 |
|
|
|
124.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Interest bearing liabilities |
|
|
83.8 |
|
|
|
108.6 |
|
|
|
104.9 |
|
Deferred tax liabilities |
|
|
2.3 |
|
|
|
|
|
|
|
|
|
Provisions |
|
|
0.5 |
|
|
|
0.6 |
|
|
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities |
|
|
86.6 |
|
|
|
109.2 |
|
|
|
105.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
145.2 |
|
|
|
170.6 |
|
|
|
230.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets |
|
|
2,877.5 |
|
|
|
2,793.4 |
|
|
|
2,899.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Contributed equity |
|
|
2,620.0 |
|
|
|
2,620.0 |
|
|
|
2,620.0 |
|
Treasury shares |
|
|
(1.3 |
) |
|
|
(1.3 |
) |
|
|
(1.5 |
) |
Reserves |
|
|
(490.8 |
) |
|
|
(628.4 |
) |
|
|
(451.9 |
) |
Retained profits |
|
|
749.6 |
|
|
|
803.1 |
|
|
|
732.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
2,877.5 |
|
|
|
2,793.4 |
|
|
|
2,899.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
Consolidated Statement of Changes in Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributed Equity1 US$ million |
|
|
Reserves US$ million |
|
|
Retained Profits US$ million |
|
|
Total US$ million |
|
Balance as at 1 January 2013 |
|
|
2,152.6 |
|
|
|
(259.0 |
) |
|
|
734.9 |
|
|
|
2,628.5 |
|
Loss for the half-year |
|
|
|
|
|
|
|
|
|
|
(2.4 |
) |
|
|
(2.4 |
) |
Other comprehensive loss for the half-year |
|
|
|
|
|
|
(193.4 |
) |
|
|
|
|
|
|
(193.4 |
) |
Transactions with owners in their capacity as owners: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions of equity, net of transaction costs after tax |
|
|
465.9 |
|
|
|
|
|
|
|
|
|
|
|
465.9 |
|
Movement in share based payments reserve |
|
|
|
|
|
|
0.5 |
|
|
|
|
|
|
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2013 |
|
|
2,618.5 |
|
|
|
(451.9 |
) |
|
|
732.5 |
|
|
|
2,899.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 1 July 2013 |
|
|
2,618.5 |
|
|
|
(451.9 |
) |
|
|
732.5 |
|
|
|
2,899.1 |
|
Profit for the half-year |
|
|
|
|
|
|
|
|
|
|
2.9 |
|
|
|
2.9 |
|
Other comprehensive (loss)/income for the half-year |
|
|
|
|
|
|
(176.7 |
) |
|
|
67.7 |
|
|
|
(109.0 |
) |
Transactions with owners in their capacity as owners: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Movement in treasury shares |
|
|
0.2 |
|
|
|
|
|
|
|
|
|
|
|
0.2 |
|
Movement in share based payments reserve |
|
|
|
|
|
|
0.2 |
|
|
|
|
|
|
|
0.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 31 December 2013 |
|
|
2,618.7 |
|
|
|
(628.4 |
) |
|
|
803.1 |
|
|
|
2,793.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 1 January 2014 |
|
|
2,618.7 |
|
|
|
(628.4 |
) |
|
|
803.1 |
|
|
|
2,793.4 |
|
Loss for the half-year |
|
|
|
|
|
|
|
|
|
|
(47.4 |
) |
|
|
(47.4 |
) |
Other comprehensive income/(loss) for the half-year |
|
|
|
|
|
|
137.2 |
|
|
|
(6.1 |
) |
|
|
131.1 |
|
Transactions with owners in their capacity as owners: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Movement in share based payments reserve |
|
|
|
|
|
|
0.4 |
|
|
|
|
|
|
|
0.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2014 |
|
|
2,618.7 |
|
|
|
(490.8 |
) |
|
|
749.6 |
|
|
|
2,877.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Treasury shares have been deducted from contributed equity. |
12
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
Consolidated Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Half-Year ended 30 June 2014 US$ million |
|
|
Half-Year ended 31 Dec 2013 US$ million |
|
|
Half-Year ended 30 June 2013 US$ million |
|
Cash Flows Related to Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Payments to suppliers and employees (inclusive of goods and services tax) |
|
|
(8.4 |
) |
|
|
(7.2 |
) |
|
|
(7.5 |
) |
GST refund received |
|
|
0.3 |
|
|
|
0.2 |
|
|
|
0.4 |
|
Dividends received from associates |
|
|
|
|
|
|
75.0 |
|
|
|
25.0 |
|
Distributions received from associates |
|
|
2.6 |
|
|
|
3.4 |
|
|
|
3.9 |
|
Interest received |
|
|
|
|
|
|
0.1 |
|
|
|
0.2 |
|
Finance costs |
|
|
(6.6 |
) |
|
|
(13.7 |
) |
|
|
(11.8 |
) |
Other |
|
|
(0.6 |
) |
|
|
(0.3 |
) |
|
|
(0.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (outflow)/inflow from operating activities |
|
|
(12.7 |
) |
|
|
57.5 |
|
|
|
10.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows Related to Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Payments to investments in associates |
|
|
(32.0 |
) |
|
|
|
|
|
|
(12.0 |
) |
Proceeds from return of invested capital |
|
|
51.6 |
|
|
|
3.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash inflow/(outflow) from investing activities |
|
|
19.6 |
|
|
|
3.0 |
|
|
|
(12.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows Related to Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
|
30.0 |
|
|
|
40.0 |
|
|
|
30.0 |
|
Repayment of borrowings |
|
|
(55.4 |
) |
|
|
(100.4 |
) |
|
|
(481.0 |
) |
Proceeds from share issue |
|
|
|
|
|
|
|
|
|
|
467.2 |
|
Share issue transaction costs |
|
|
|
|
|
|
|
|
|
|
(1.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (outflow)/inflow from financing activities |
|
|
(25.4 |
) |
|
|
(60.4 |
) |
|
|
14.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease)/Increase in Cash and cash equivalents |
|
|
(18.5 |
) |
|
|
0.1 |
|
|
|
12.9 |
|
Cash and cash equivalents at the beginning of the reporting period |
|
|
24.0 |
|
|
|
23.8 |
|
|
|
10.1 |
|
Effects of exchange rate changes on cash and cash equivalents |
|
|
(0.5 |
) |
|
|
0.1 |
|
|
|
0.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the reporting period |
|
|
5.0 |
|
|
|
24.0 |
|
|
|
23.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
1. Basis of Preparation
This consolidated interim financial report for the half-year ended 30 June 2014 has been prepared in accordance with the Accounting Standard AASB 134
Interim Financial Reporting and the Corporations Act 2001.
This consolidated interim financial report does not include all the notes of the
type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 31 December 2013 and any public announcements made by Alumina Limited during the interim
reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.
The accounting policies adopted are
consistent with those of the previous financial year and corresponding interim reporting period.
2. Reconciliation of Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June 2014 US$ million |
|
|
31 Dec 2013 US$ million |
|
|
30 June 2013 US$ million |
|
Reconciliation of cash at the end of the reporting period (as shown in the consolidated statement of cash flows) as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash on hand and at bank |
|
|
3.0 |
|
|
|
4.0 |
|
|
|
3.3 |
|
|
|
|
|
Money market deposits (with maturity on investment three months or less) |
|
|
2.0 |
|
|
|
20.0 |
|
|
|
20.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash and cash equivalents at the end of the reporting period |
|
|
5.0 |
|
|
|
24.0 |
|
|
|
23.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Consolidated Retained Profits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Half-Year ended 30 June 2014 US$ million |
|
|
Half-Year ended 31 Dec 2013 US$ million |
|
|
Half-Year ended 30 June 2013 US$ million |
|
Retained profits at the beginning of the reporting period |
|
|
803.1 |
|
|
|
732.5 |
|
|
|
734.9 |
|
|
|
|
|
Net (loss)/profit attributable to members of Alumina Limited |
|
|
(47.4 |
) |
|
|
2.9 |
|
|
|
(2.4 |
) |
Re-measurements of retirement benefit obligations accounted for using the equity method |
|
|
(6.1 |
) |
|
|
67.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained profits at the end of the reporting period |
|
|
749.6 |
|
|
|
803.1 |
|
|
|
732.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
4. Income Tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Half-Year ended 30 June 2014 US$ million |
|
|
Half-Year ended 31 Dec 2013 US$ million |
|
|
Half-Year ended 30 June 2013 US$ million |
|
(Loss)/profit from ordinary activities before tax |
|
|
(44.3 |
) |
|
|
2.9 |
|
|
|
(2.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Prima facie tax credit/(expense) for the period at the rate of 30% |
|
|
13.3 |
|
|
|
(0.9 |
) |
|
|
0.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following items caused the total charge for income tax to vary from the above: |
|
|
|
|
|
|
|
|
|
|
|
|
Share of equity accounted (profit)/loss not assessable for tax |
|
|
30.7 |
|
|
|
112.7 |
|
|
|
(15.3 |
) |
Foreign income subject to accruals tax |
|
|
0.8 |
|
|
|
1.4 |
|
|
|
0.3 |
|
Share of Partnership income assessable for tax |
|
|
2.6 |
|
|
|
3.4 |
|
|
|
3.9 |
|
Timing differences not recognised |
|
|
(3.5 |
) |
|
|
21.2 |
|
|
|
(23.5 |
) |
Tax losses not recognised |
|
|
15.0 |
|
|
|
(5.3 |
) |
|
|
36.1 |
|
Previously unrecognised tax losses now recouped to reduce current income tax expense |
|
|
(0.5 |
) |
|
|
|
|
|
|
|
|
Non-deductible expenses |
|
|
0.6 |
|
|
|
0.8 |
|
|
|
0.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net movement |
|
|
45.7 |
|
|
|
134.2 |
|
|
|
2.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consequent increase in charge for income tax |
|
|
(13.7 |
) |
|
|
(40.2 |
) |
|
|
(0.7 |
) |
Prima facie charge not recognised as cannot yet be determined |
|
|
|
|
|
|
41.1 |
|
|
|
|
|
Estimated tax expense in relation to allocation agreement |
|
|
(2.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Income tax expense for the reporting period |
|
|
(3.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of Alba settlement terms and related transactions
As previously disclosed, in September 2012, Alcoa Inc and Alumina Limited had entered into an agreement that the cash costs (including legal fees) of
settlement of the Department of Justice (DoJ) and Securities & Exchange Commission (SEC) investigations, as well as the $85 million civil settlement with Alba reached in October 2012 recorded in the accounts of Alcoa World Alumina LLC
(AWA), will be adjusted to ensure that 85% will be allocated to Alcoa Inc and 15% to Alumina Limited (should settlements be reached on the regulatory investigations, as described above). AWA is a Company within AWAC.
With the DoJ and SEC settlements having been reached in January 2014, the allocation provisions of the above agreement became applicable. To reflect the
provisions of the allocation agreement, as at 31 December 2013, Alumina Limited recognised $137.1 million (representing 25% of the total Alba settlement payments and costs) as other assets with the corresponding credit recognised in the
Statement of Profit or Loss as other income.
At the time of the recognition, Alumina Limited was evaluating with Alcoa Inc the structural options
(including the form and timing) for the recovery of the other assets recognised under the provisions of the allocation agreement. Therefore, the tax impact in relation to the other income recognised by Alumina Limited under the agreements
provisions was unable to be determined at 31 December 2013.
Alumina Limited has since obtained independent expert advice and has in relation to the
other income amount, recognised a net deferred tax liability of $2.7 million and the corresponding income tax expense, as this is the present best estimate of the likely tax consequences. Discussion with Alcoa Inc on the structural options
(including the form and timing) for the recovery of the other assets is still ongoing and the outcome of this discussion may impact the amount of a net deferred tax liability recognised by Alumina Limited.
15
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
5. Contributed Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Half-Year ended 30 June 2014 US$ million |
|
|
Half-Year ended 31 Dec 2013 US$ million |
|
|
Half-Year ended 30 June 2013 US$ million |
|
Ordinary share capital issued and fully paid |
|
|
|
|
|
|
|
|
|
|
|
|
Balance brought forward |
|
|
2,620.0 |
|
|
|
2,620.0 |
|
|
|
2,154.1 |
|
Shares issued |
|
|
|
|
|
|
|
|
|
|
467.2 |
|
Less: Transaction costs on share issue |
|
|
|
|
|
|
|
|
|
|
(1.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total issued capital |
|
|
2,620.0 |
|
|
|
2,620.0 |
|
|
|
2,620.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares |
|
|
Number of shares |
|
|
Number of shares |
|
Movements in Ordinary Share Capital |
|
|
|
|
|
|
|
|
|
|
|
|
Opening number of shares |
|
|
2,806,225,615 |
|
|
|
2,806,225,615 |
|
|
|
2,440,196,187 |
|
Movement for the period |
|
|
|
|
|
|
|
|
|
|
366,029,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing number of shares |
|
|
2,806,225,615 |
|
|
|
2,806,225,615 |
|
|
|
2,806,225,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On 14 February 2013, CITIC Resources Australia Pty Ltd and Bestbuy Overseas Co., Ltd unconditionally subscribed, in
aggregate, for 366,029,428 fully paid ordinary shares in Alumina limited, being 15% of Alumina Limiteds then current capital base, representing 13.04% of Alumina Limiteds capital base following completion (the Placement).
The Placement raised approximately A$452 million based on an issue price of A$1.235 per share, which reflected a premium of approximately 3% to the closing
price of Alumina Limited shares on 13 February 2013 and a premium of 11% to the volume weighted average price of Alumina limited shares for the 30 day period ending 13 February 2013.
6. Earnings Per Share (EPS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Half-Year ended 30 June 2014 |
|
|
Half-Year ended 31 Dec 2013 |
|
|
Half-Year ended 30 June 2013 |
|
(Loss)/profit attributable to the ordinary equity holders of the Company used in calculation of basic and diluted EPS (US$
million) |
|
|
(47.4 |
) |
|
|
2.9 |
|
|
|
(2.4 |
) |
|
|
|
|
Weighted average number of ordinary shares used as the denominator in the calculation of basic and diluted EPS |
|
|
2,805,726,301 |
|
|
|
2,760,518,829 |
|
|
|
2,714,554,500 |
|
|
|
|
|
Basic EPS (US cents) |
|
|
Negative 1.7 |
|
|
|
Positive 0.12 |
|
|
|
Negative 0.1 |
|
Diluted EPS (US cents) |
|
|
Negative 1.7 |
|
|
|
Positive 0.12 |
|
|
|
Negative 0.1 |
|
7. Net Tangible Asset Backing Per Security
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June 2014 |
|
|
31 Dec 2013 |
|
|
30 June 2013 |
|
Net assets (US$ million) |
|
|
2,877.5 |
|
|
|
2,793.4 |
|
|
|
2,899.1 |
|
Less equity accounted intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill (US$ million) |
|
|
175.8 |
|
|
|
175.8 |
|
|
|
175.8 |
|
Mineral rights and bauxite assets net of deferred tax liabilities (US$ million) |
|
|
75.9 |
|
|
|
76.8 |
|
|
|
77.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net tangible assets (US$ million) |
|
|
2,625.8 |
|
|
|
2,540.8 |
|
|
|
2,645.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of issued ordinary shares (including treasury shares) |
|
|
2,806,225,615 |
|
|
|
2,806,225,615 |
|
|
|
2,806,225,615 |
|
Net tangible asset backing per ordinary security (US$) |
|
|
0.94 |
|
|
|
0.91 |
|
|
|
0.94 |
|
16
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
8. Dividends
Since the half-year end the Directors have determined that no interim dividend will be announced for the half-year ended 30 June 2014. The Board will
continue to review the dividend at each half-year in light of current and expected business conditions. Directors have continued the suspension of the Companys Dividend Reinvestment Plan.
The franking account balance, which is maintained in Australian dollars, was A$409.1 million as at 30 June 2014 (A$409.1 million as at 31 December
2013 and A$374.5 million as at 30 June 2013).
|
|
|
|
|
|
|
|
|
Half-Year ended 30 June 2014 US cents |
|
Half-Year ended 31 Dec 2013 US cents |
|
Half-Year ended 30 June 2013 US cents |
Fully franked interim dividends per share |
|
Nil |
|
n/a |
|
Nil |
Fully franked final dividends per share |
|
n/a |
|
Nil |
|
n/a |
b) |
Total Dividend Paid on All Shares |
|
|
|
|
|
|
|
|
|
Half-Year ended 30 June 2014 US$ million |
|
Half-Year ended 31 Dec 2013 US$ million |
|
Half-Year ended 30 June 2013 US$ million |
Fully franked interim dividends |
|
Nil |
|
n/a |
|
Nil |
Fully franked final dividends |
|
n/a |
|
Nil |
|
n/a |
9. Material Interests in Entities which are Not Controlled Entities
Alumina Limited has an interest in the following entities forming AWAC:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ownership Interest Held (%) |
|
|
|
30 June 2014 |
|
|
31 Dec 2013 |
|
|
30 June 2013 |
|
Alcoa of Australia Limited |
|
|
40 |
|
|
|
40 |
|
|
|
40 |
|
Alcoa World Alumina LLC |
|
|
40 |
|
|
|
40 |
|
|
|
40 |
|
Alumina Espanola S.A. |
|
|
40 |
|
|
|
40 |
|
|
|
40 |
|
Alcoa World Alumina Brasil Ltda. |
|
|
40 |
|
|
|
40 |
|
|
|
40 |
|
AWA Saudi Ltda. |
|
|
40 |
|
|
|
40 |
|
|
|
40 |
|
Enterprise Partnership |
|
|
40 |
|
|
|
40 |
|
|
|
40 |
|
10. Details of Entities Over Which Control Has Been Lost or Gained
There was no loss or gain of control for the half-year ended 30 June 2014.
17
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
11. AWAC contribution to net (loss)/profit of Alumina Limited and Controlled Entities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Half-Year ended 30 June 2014 US$ million |
|
|
Half-Year ended 31 Dec 2013 US$ million |
|
|
Half-Year ended 30 June 2013 US$ million |
|
(Loss)/profit from ordinary activities before income tax |
|
|
(44.6 |
) |
|
|
(80.7 |
) |
|
|
7.4 |
|
Income tax benefit/(expense) on ordinary activities |
|
|
13.9 |
|
|
|
(32.0 |
) |
|
|
7.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity share of net (loss)/profit after tax1 |
|
|
(30.7 |
) |
|
|
(112.7 |
) |
|
|
15.3 |
|
Dividends received/receivable by Alumina Limited |
|
|
|
|
|
|
(50.0 |
) |
|
|
(50.0 |
) |
Distributions received by Alumina Limited |
|
|
(2.6 |
) |
|
|
(3.4 |
) |
|
|
(3.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Surplus of dividends/distributions received/receivable over equity share of net loss |
|
|
(33.3 |
) |
|
|
(166.1 |
) |
|
|
(38.6 |
) |
1 |
The (loss)/profit for the six month periods ended 30 June 2014, 31 December 2013 and 30 June 2013 include significant items that have affected
AWACs net (loss)/profit after tax. For further details refer to the reconciliation on page 23. |
12. Financing Facilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30 June 2014 US$ million |
|
|
31 Dec 2013 US$ million |
|
|
30 June 2013 US$ million |
|
Total available facilities |
|
|
405.0 |
|
|
|
179.2 |
|
|
|
901.0 |
|
Undrawn at end of reporting period |
|
|
270.0 |
|
|
|
20.0 |
|
|
|
680.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drawn at end of reporting period |
|
|
135.0 |
|
|
|
159.2 |
|
|
|
221.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total committed facilities |
|
|
405.0 |
|
|
|
479.2 |
|
|
|
901.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available funding facilities as at 30 June 2014 were a US$300 million syndicated bank facility and a development bank
loan. The syndicated bank facility has two tranches maturing in December 2015 and December 2017. This facility was fully committed as at 31 December 2013 and became available to draw funds on 24 January 2014 following satisfaction of all
conditions precedent. The development bank loan is fully drawn in US dollars and Brazilian Reais and amortises at approximately $51 million per annum until July 2016. Funding facilities in currencies other than US dollars have been converted to
US dollar equivalents at period end exchange rates.
13. Segment Information
Alumina Limiteds primary assets are its 40 per cent interest in the series of operating entities forming AWAC. Alumina Limited has one reportable
segment, namely the investment in the alumina/aluminium business through its equity interest in AWAC.
14. Events Occurring After the Balance Sheet
Date
There have been no significant events occurring since 30 June 2014.
18
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
Directors Declaration
In the directors opinion:
a) |
the financial statements and notes set out on pages 5 to 13 are in accordance with the Corporations Act 2001, including: |
|
(i) |
complying with Accounting Standard AASB134 Interim Financial Reporting, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and |
|
(ii) |
giving a true and fair view of the consolidated entitys financial position as at 30 June 2014 and of its performance for the half-year ended on that date; and |
b) |
there are reasonable grounds to believe that Alumina Limited will be able to pay its debts as and when they become due and payable. |
This declaration is made in accordance with a resolution of the directors.
Peter Wasow
Director
Melbourne
21 August 2014
19
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
Independent auditors review report to the members of Alumina Limited
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of Alumina Limited (the Company), which comprises the consolidated balance sheet
as at 30 June 2014, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, selected explanatory
notes and the directors declaration for Alumina Limited Group (the consolidated entity). The consolidated entity comprises the Company and the entities it controlled during that half-year.
Directors responsibility for the half-year financial report
The directors of the Company are responsible for the preparation of the half-year financial report that gives a true and fair view in
accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the
half-year financial report that is free from material misstatement whether due to fraud or error.
Auditors responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance
with Australian Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of
any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entitys financial position as at 30 June 2014 and its performance
for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Alumina Limited, ASRE 2410 requires that we comply with the
ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making
enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards
and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In
conducting our review, we have complied with the independence requirements of the Corporations Act 2001.
PricewaterhouseCoopers, ABN 52 780 433 757
Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
20
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
(Previous corresponding
period half-year ended 30 June 2013)
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of
Alumina Limited is not in accordance with the Corporations Act 2001 including:
|
(a) |
giving a true and fair view of the consolidated entitys financial position as at 30 June 2014 and of its performance for the half-year ended on that date; |
|
(b) |
complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. |
|
|
|
|
|
|
|
|
PricewaterhouseCoopers |
|
|
|
|
|
|
|
|
|
Nadia Carlin |
|
Melbourne |
Partner |
|
21 August 2014 |
21
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
Supplementary Appendix 4D
Information
Alumina Limited Highlights
Net loss after tax and significant items
|
|
$47.4 million loss (1H 2013: loss of $2.4 million). |
|
|
Total significant items of $74.2 million negatively affected the net loss (1H 2013: $39.0 million). |
|
|
Significant items include Point Henry restructuring charges, tax effect on Alba allocation amount and profit on the sale of gold mining interest in Suriname (1H 2013: includes Alba legal matter and Anglesea statutory
maintenance). |
|
|
Net profit of $26.8 million excluding significant items (1H 2013: net profit $36.6 million). |
Balance Sheet Strengthened
|
|
Net debt reduced to $130.0 million. |
|
|
Gearing reduced to 4.3%. |
Capital and Income Receipts from AWAC
|
|
Capital returns of $51.6 million (1H 2013: Nil). |
|
|
Distributions of $2.6 million (1H 2013: $3.9 million). |
|
|
No dividends received (1H 2013: $25.0 million). |
AWAC Highlights (US GAAP)
EBITDA and significant items
|
|
$119.2 million EBITDA (1H 2013: $229.8 million). |
|
|
$345.6 million EBITDA excluding significant items (1H 2013: $364.8 million). |
|
|
$44 per tonne alumina EBITDA margin (1H 2013: $45 per tonne). |
Benefits from spot or alumina
based pricing
|
|
63% of third party smelter grade alumina shipments were priced on spot or alumina indexed basis (1H 2013: 53%). |
|
|
Revenue per tonne from alumina sales priced by reference to indices and spot continued to be higher than legacy LME-linked contracts. |
|
|
Revenue declined by $166.0 million principally due to a reduction in average realised alumina prices and lower alumina shipments. |
Lower COGS and operating expenses
|
|
COGS and operating expenses declined by $185.1 million compared to 1H 2013 (the comparative period included the Anglesea power station statutory maintenance costs) mainly reflecting favourable exchange rate
movements, lower alumina shipments and the benefit of productivity initiatives and cost control. |
|
|
The cash cost of alumina production per tonne decreased by 4.7% compared to the corresponding period.
|
Alumina Limited Key Financials
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
|
|
|
|
Net (loss)/profit after tax US$m |
|
|
(47.4 |
) |
|
|
2.9 |
|
|
|
(2.4 |
) |
Total significant items after tax US$m1 |
|
|
(74.2 |
) |
|
|
9.9 |
|
|
|
(39.0 |
) |
Net profit/(loss) after tax excluding significant items US$m |
|
|
26.8 |
|
|
|
(7.0 |
) |
|
|
36.6 |
|
|
|
|
|
Cash received from AWAC US$m |
|
|
54.2 |
|
|
|
81.4 |
|
|
|
28.9 |
|
Net Debt US$m |
|
|
130.0 |
|
|
|
135.2 |
|
|
|
197.2 |
|
Gearing2 |
|
|
4.3 |
% |
|
|
4.6 |
% |
|
|
6.3 |
% |
EPS (US cps) |
|
|
(1.7 |
) |
|
|
0.12 |
|
|
|
(0.1 |
) |
1 |
For further details refer to the reconciliation on page 23. |
2 |
Calculated as (debt - cash) / (debt + equity). |
AWAC Key Financials
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
|
|
US$m |
|
|
US$m |
|
|
US$m |
|
Total Revenue |
|
|
2,798.9 |
|
|
|
2,919.7 |
|
|
|
2,964.9 |
|
COGS and operating expenses |
|
|
(2,396.5 |
) |
|
|
(2,507.3 |
) |
|
|
(2,581.6 |
) |
EBITDA1 |
|
|
119.2 |
|
|
|
39.0 |
|
|
|
229.8 |
|
Total significant items1 |
|
|
(226.4 |
) |
|
|
(324.0 |
) |
|
|
(135.0 |
) |
EBITDA excluding significant items1 |
|
|
345.6 |
|
|
|
363.0 |
|
|
|
364.8 |
|
1 |
For further details refer to the reconciliation on page 23. |
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
Supplementary Appendix 4D
Information
AWAC Business Review (US GAAP)
Mining
AWAC owns or partly owns, bauxite mines
operating in six countries that meet the production needs of the AWAC refineries, and also on occasion supplying third party refineries.
Mine costs per
tonne were lower than 2013 levels, with the exception of Suriname. Costs increases in Suriname were associated with a new mining site.
Refining
Production of alumina was 7.9 million tonnes in 1H 2014, compared to 7.8 million tonnes in 1H 2013. Increased production at
the Australian refineries, Sao Luis and at Point Comfort contributed to most of the increase.
Alumina shipments were 7.8 million tonnes in
1H 2014, 0.2 million tonnes lower than 1H 2013 largely due to delayed shipments.
Approximately 63% of third party smelter grade alumina
shipments were priced on spot or alumina indexed basis compared to 53% for the corresponding period. For 2016, shipments of smelter grade alumina priced on spot or alumina indexed basis are expected to be at least 80% of total shipments. Revenue per
tonne from smelter grade alumina sales priced by reference to indices and spot continued to be higher than the legacy LME-linked contracts.
The average three-month LME aluminium price, determined on a two-month lag basis, declined by 11.4% compared to the corresponding period, whereas average
alumina price index FOB Australia (one-month lag) decreased by 2.7%. This resulted in the average realised third party smelter grade alumina prices reducing by 5.1% compared to the corresponding period.
The average 1H 2014 cash cost of alumina per tonne produced decreased by 4.7% over 1H 2013. The decrease reflects productivity initiatives and
efforts to create more stable operating conditions to avoid costs associated with production disruptions. In addition, the Australian dollar and Brazilian Reais weakened against the US dollar, providing significant currency benefits compared to
the corresponding period.
The EBITDA margin was $44 per tonne produced in 1H 2014, a decrease of $1 per tonne on 1H 2013. The EBITDA margin is
calculated as AWACs EBITDA excluding significant items, smelters operating results and equity accounted income/(losses) divided by tonnes produced.
Maaden Investment
The AWAC (25.1%) and
Saudi Arabian Mining Company (74.9%) joint venture Maaden was created for the construction of a 4.0 million tonnes per annum capacity mine and a 1.8 million tonnes per annum capacity refinery at Ras Al Khair in Saudi
Arabia. This is AWACs major growth project which will assist AWAC in further reducing its low refinery cash cost position.
The refinery is
approximately 95% complete and whilst the mine is approximately 70% complete, it has begun operations providing feed stock to the refinery. The first alumina is due from the refinery in the fourth quarter of 2014.
The 1H 2014 result included $14.7 million of losses related to Maaden start up activities.
AWAC Production and Shipments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
Alumina shipments |
|
|
7.8mt |
|
|
|
8.1mt |
|
|
|
8.0mt |
|
Alumina production |
|
|
7.9mt |
|
|
|
8.0mt |
|
|
|
7.8mt |
|
Aluminium shipments |
|
|
174kt |
|
|
|
178kt |
|
|
|
171kt |
|
Aluminium production |
|
|
175kt |
|
|
|
180kt |
|
|
|
174kt |
|
AWAC Profit and Loss (US GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
|
|
US$m |
|
|
US$m |
|
|
US$m |
|
Sales revenue |
|
|
1,795.4 |
|
|
|
1,895.1 |
|
|
|
1,875.7 |
|
Related party revenue |
|
|
1,003.5 |
|
|
|
1,024.6 |
|
|
|
1,089.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
|
|
2,798.9 |
|
|
|
2,919.7 |
|
|
|
2,964.9 |
|
|
|
|
|
COGS and operating expenses |
|
|
(2,396.5 |
) |
|
|
(2,507.3 |
) |
|
|
(2,581.6 |
) |
Selling, Admin, R&D |
|
|
(54.7 |
) |
|
|
(61.3 |
) |
|
|
(61.9 |
) |
Net interest |
|
|
(2.9 |
) |
|
|
(4.1 |
) |
|
|
(2.7 |
) |
Depreciation and Amortisation |
|
|
(211.1 |
) |
|
|
(212.5 |
) |
|
|
(234.6 |
) |
Restructuring & Other |
|
|
(228.5 |
) |
|
|
(312.1 |
) |
|
|
(91.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses |
|
|
(2,893.7 |
) |
|
|
(3,097.3 |
) |
|
|
(2,972.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before tax |
|
|
(94.8 |
) |
|
|
(177.6 |
) |
|
|
(7.5 |
) |
Income tax credit/(charge) |
|
|
36.1 |
|
|
|
(44.9 |
) |
|
|
(18.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss after tax1 |
|
|
(58.7 |
) |
|
|
(222.5 |
) |
|
|
(26.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
The loss for the six month periods ended 30 June 2014, 31 December 2013 and 30 June 2013 include significant items that have affected AWACs net
loss after tax. For further details refer to the reconciliation on page 23. |
Smelting
Production of approximately 175,000 tonnes in 1H 2014 was consistent with 1H 2013 as AWAC continued to operate two smelters in Australia.
On 18 February 2014 Alcoa of Australia Limited, an AWAC entity, decided to permanently close the Point Henry aluminium smelter, which was done on
1 August 2014 and as a result aluminium production will decline in 2H 2014.
Total restructuring charges associated with the closure of the Point
Henry smelter are expected to be approximately $250 million after tax on an IFRS basis.
Changes in Taxation
In December 2011, AWA Brazil applied for a tax holiday related to its expanded mining and refining operations. The tax holiday took effect on 12 July
2014. As a result, the tax rate for this subsidiary will decrease (from 34% to 15%) over the 10-year holiday period (retroactively effective as of 1 January 2013).
On 17 July 2014, the Australian Government has abolished the carbon tax, with effect from 1 July 2014. The impact in the 2014 financial
year is not expected to be material.
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
Supplementary Appendix 4D
Information
AWAC Cash Flow (US GAAP)
Cash from operations of $81.5 million includes an $88.0 million Alba related payment that was funded by a term loan. Excluding that payment, cash from
operations and free cash flow would have been $169.5 million and $80.6 million, respectively.
Cash from operations was also affected by advanced payments
received from customers during 2013 for sales of inventory in 1H 2014, higher maintenance costs due to production interruptions such as at the Point Comfort refinery (weather related), employee layoff costs in the refineries and an increase in
working capital. Cash from operations includes the gain on disposal of the gold mining interest in Suriname.
Capital expenditure totalled $88.9 million,
which is $89.3 million lower than 1H 2013.
Sustaining capital expenditure was $85.9 million compared to $155.5 million in 1H 2013.
The majority of expenditure was incurred in Australia. The Atlantic regions planned expenditure is weighted towards the second half, whereas Australias is more evenly spread,
Growth capital expenditure was $3.0 million.
Equity
contributions of $45.5 million to the Maaden mine and refinery joint venture in Saudi Arabia and $20.1 million of working capital contributions to the San Ciprian refinery in Spain are not included in capital expenditures.
AWAC Cash Flow (US GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
|
|
US$m |
|
|
US$m |
|
|
US$m |
|
Net loss after tax |
|
|
(58.7 |
) |
|
|
(222.5 |
) |
|
|
(26.2 |
) |
Depreciation and Amortisation |
|
|
211.1 |
|
|
|
212.5 |
|
|
|
234.6 |
|
Other1 |
|
|
(70.9 |
) |
|
|
251.6 |
|
|
|
206.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from operations |
|
|
81.5 |
2 |
|
|
241.6 |
|
|
|
414.4 |
|
Capital expenditure |
|
|
(88.9 |
) |
|
|
(144.4 |
) |
|
|
(178.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow3 |
|
|
(7.4 |
)2 |
|
|
97.2 |
|
|
|
236.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Other items consist of net movement in working capital and other assets and liabilities. |
2 |
Includes an Alba related payment of $88.0 million that was funded by a term loan. |
3 |
Calculated as cash from operations less capital expenditure.
|
AWAC Balance Sheet (US GAAP)
Decreased cash from operations and debt repayments partly offset by lower capital expenditure resulted in lower cash and cash equivalents as at 30 June
2014.
AWAC continued to operate with minimal borrowings.
Property, Plant and Equipment decreased mainly due to depreciation and amortisation expenses recognised including accelerated depreciated at the Point Henry
smelter, partially offset by foreign exchange revaluations.
AWAC Balance Sheet (US GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
|
|
US$m |
|
|
US$m |
|
|
US$m |
|
Cash, cash equivalents |
|
|
110.4 |
|
|
|
189.5 |
|
|
|
286.3 |
|
Receivables |
|
|
455.2 |
|
|
|
541.5 |
|
|
|
439.7 |
|
Related party note receivable |
|
|
83.9 |
|
|
|
91.5 |
|
|
|
86.6 |
|
Inventories |
|
|
727.6 |
|
|
|
671.2 |
|
|
|
719.6 |
|
Property, plant & equipment |
|
|
6,009.0 |
|
|
|
5,938.3 |
|
|
|
6,301.6 |
|
Other assets |
|
|
2,740.7 |
|
|
|
2,640.5 |
|
|
|
2,813.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
|
10,126.8 |
|
|
|
10,072.5 |
|
|
|
10,647.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short term borrowings |
|
|
70.3 |
|
|
|
59.0 |
|
|
|
74.2 |
|
Payables |
|
|
828.1 |
|
|
|
881.8 |
|
|
|
938.5 |
|
Taxes payable and deferred |
|
|
328.9 |
|
|
|
424.4 |
|
|
|
386.0 |
|
Capital lease obligations and long term debt |
|
|
134.4 |
|
|
|
116.9 |
|
|
|
66.3 |
|
Other liabilities |
|
|
1,655.8 |
|
|
|
1,728.7 |
|
|
|
1,661.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
3,017.5 |
|
|
|
3,210.8 |
|
|
|
3,126.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
7,109.3 |
|
|
|
6,861.7 |
|
|
|
7,521.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
Supplementary Appendix 4D
Information
Alumina Limited Reported Profit
The net loss after tax was $47.4 million compared to a loss of $2.4 million in 1H 2013.
The net loss was negatively affected by the equity share of AWACs significant items totalling $74.2 million in 1H 2014 (1H 2013:
$39.0 million). Significant items include Point Henry restructuring charges and the profit on sale of gold mining interest in Suriname (1H 2013: includes Alba legal matter and Anglesea statutory maintenance costs).
Excluding significant items, net profit in 1H 2014 was $26.8 million (1H 2013: net profit of $36.6 million).
Most of Alumina Limiteds general and administrative costs are incurred in Australian dollars. The decrease in costs is due to currency fluctuations and
lower expenses.
Finance costs include interest expense, commitment fees paid, amortised upfront fees and bank charges. Total Finance costs decreased to
$6.9 million from $11.5 million in 1H 2013 mainly due to a reduction in interest expense corresponding to reduced borrowings following the share placement in 1H 2013.
Alumina Limited Balance Sheet
Alumina Limiteds net
debt as at 30 June 2014 declined to $130.0 million. Gearing also decreased to 4.3%.
The Company has a fully drawn debt facility from the Brazil
National Development Bank (BNDES). This facility amortises at approximately $51.2 million per annum until July 2016. Amounts outstanding at 30 June 2014 under the BNDES loan were $105.0 million.
Alumina Limiteds committed bank facilities amounted to $300.0 million as at 30 June 2014, which expire as follows:
|
|
$150 million in December 2015 (drawn to $30 million as at 30 June 2014) |
|
|
$150 million in December 2017 (no amounts drawn under these facilities as at 30 June 2014) |
Current
liabilities include $51.2 million of repayments on the facility from the BNDES that are due before 30 June 2015. Current liabilities of $58.6 million exceeded current assets of $28.3 million. However, the Directors are confident
that the liabilities can be met using available cash and undrawn committed facilities whose maturities extend beyond 30 June 2015.
Alumina Limited Reported Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
|
|
US$m |
|
|
US$m |
|
|
US$m |
|
|
|
|
|
Share of AWAC (loss)/profit |
|
|
(30.7 |
) |
|
|
(112.7 |
) |
|
|
15.3 |
|
Other income |
|
|
|
|
|
|
137.1 |
1 |
|
|
|
|
General and admin costs |
|
|
(6.4 |
) |
|
|
(9.6 |
)2 |
|
|
(7.6 |
) |
Finance costs |
|
|
(6.9 |
) |
|
|
(13.8 |
) |
|
|
(11.5 |
) |
Other & tax |
|
|
(3.4 |
)3 |
|
|
1.9 |
|
|
|
1.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/profit after tax |
|
|
(47.4 |
) |
|
|
2.9 |
|
|
|
(2.4 |
) |
Alumina Limited Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
|
|
US$m |
|
|
US$m |
|
|
US$m |
|
Cash and equivalents |
|
|
5.0 |
|
|
|
24.0 |
|
|
|
23.8 |
|
Investments |
|
|
2,877.2 |
|
|
|
2,798.9 |
|
|
|
3,076.8 |
|
Other assets |
|
|
140.5 |
1 |
|
|
141.1 |
1 |
|
|
28.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
|
3,022.7 |
|
|
|
2,964.0 |
|
|
|
3,129.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payables |
|
|
1.5 |
|
|
|
3.9 |
|
|
|
1.5 |
|
Interest bearing liabilities current |
|
|
51.2 |
|
|
|
50.6 |
|
|
|
116.1 |
|
Interest bearing liabilities non-current |
|
|
83.8 |
|
|
|
108.6 |
|
|
|
104.9 |
|
Other liabilities |
|
|
8.7 |
3 |
|
|
7.5 |
|
|
|
7.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
145.2 |
|
|
|
170.6 |
|
|
|
230.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets |
|
|
2,877.5 |
|
|
|
2,793.4 |
|
|
|
2,899.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes for the Alumina Limited reported Profit and Balance sheet
1 |
Alumina Limited recognised the effect of the agreement with Alcoa Inc by posting $137.1 million (representing 25% of the total Alba related charges) as other asset with the corresponding credit recognised in the
Statement of Profit or Loss as other income. |
2 |
Includes CEO retirement payments. |
3 |
Alumina Limited recognised a deferred tax liability of $2.7 million and the corresponding income tax expense in relation to the other income of $137.1 million recognised in 2013.
|
25
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
Supplementary Appendix 4D
Information
Alumina Limited Cash Flow
Alumina Limiteds free cash from operations principally comprise the net capital and income distributions received from the AWAC entities offset by the
Companys general, administrative and finance costs.
Alumina Limited received income distributions of $2.6 million and capital returns of $51.6
million from AWAC in 1H 2014 compared to distributions of $3.9 million and $25.0 million of fully franked dividends in 1H 2013.
The capital
returns from AWAC of $51.6 million, equity contributions to the Maaden joint venture of $18.4 million, Maaden entry fee reimbursement to Alcoa Inc of $5.4 million and working capital contributions to the San Ciprian refinery in Spain of
$8.2 million are included in the net proceeds/(payments) to investments in associates.
Alumina Limited Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
|
|
US$m |
|
|
US$m |
|
|
US$m |
|
Dividends received |
|
|
|
|
|
|
75.0 |
|
|
|
25.0 |
|
Distributions received |
|
|
2.6 |
|
|
|
3.4 |
|
|
|
3.9 |
|
Finance costs paid |
|
|
(6.6 |
) |
|
|
(13.7 |
) |
|
|
(11.8 |
) |
Payments to suppliers and employees |
|
|
(8.4 |
)1 |
|
|
(7.2 |
) |
|
|
(7.5 |
) |
GST refund, interest received and other |
|
|
(0.3 |
) |
|
|
|
|
|
|
0.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash from operations |
|
|
(12.7 |
) |
|
|
57.5 |
|
|
|
10.0 |
|
|
|
|
|
Net proceeds/(payments) to investments in associates |
|
|
19.6 |
|
|
|
3.0 |
|
|
|
(12.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow2 |
|
|
6.9 |
|
|
|
60.5 |
|
|
|
(2.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Includes CEO retirement payments. |
2 |
Free cash flow calculated as cash from operations less net investments in associates.
|
26
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
Supplementary Appendix 4D
Information
Guidance
The following guidance is provided to assist the understanding of the sensitivity of AWAC results to certain factors. The guidance cannot be expected to be
predictive of exact results; rather it provides direction and approximate quantum of the impact on profit before tax of movements around a given base figure. Actual results will vary from those computed using the guidance. Guidance is not linear,
hence significant movement away from the base rates used may result in different sensitivities. Sensitivity of each element of the guidance has been considered in isolation and no correlation with movements in other elements within the guidance has
been made.
|
|
|
|
|
Item |
|
February 2014 Guidance |
|
August 2014 Guidance |
|
|
|
Production alumina |
|
Approximately 16.0mt |
|
Approximately 16.0mt |
|
|
|
Production aluminium |
|
Approximately 359,000t |
|
Approximately 267,000t1 |
|
|
|
Australian $ Sensitivity: +1¢ in USD/AUD |
|
Approximately -$30 million profit before tax
Approximately -$1.40/t alumina EBITDA |
|
Approximately -$30 million profit before tax
Approximately -$1.40/t alumina EBITDA |
|
|
|
Brazilian $ Sensitivity: +1¢ in BRL/USD |
|
Approximately +$3 million profit before tax
Approximately $0.10/t alumina EBITDA |
|
Approximately +$3 million profit before tax
Approximately $0.10/t alumina EBITDA |
|
|
|
Third party smelter grade alumina shipments expected to be based on alumina price indices or spot |
|
Approximately 65% for the year |
|
Approximately 65% for the year |
|
|
|
AWAC sustaining capital expenditure |
|
Approximately $240 million |
|
Approximately $260 million |
|
|
|
AWAC growth capital expenditure2 |
|
Approximately $25 million |
|
Approximately $10 million |
Definitions:
1 |
Lower due to the closure of Point Henry in August 2014. |
2 |
Does not include investment in the Maaden growth project. |
27
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
Supplementary Appendix 4D
Information
Reconciliations
AWACs significant items (US GAAP)
The AWACs net loss was negatively affected by individually significant items. These items are disclosed in the table to enhance an understanding of
AWACs operational performance during the reporting period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
Significant Items |
|
US$m |
|
|
US$m |
|
|
US$m |
|
Point Henry restructuring charges |
|
|
(254.3 |
) |
|
|
|
|
|
|
|
|
Alba legal matter |
|
|
|
|
|
|
(281.0 |
) |
|
|
(103.0 |
) |
Anglesea statutory maintenance |
|
|
|
|
|
|
|
|
|
|
(32.0 |
) |
Goodwill impairment |
|
|
|
|
|
|
(30.0 |
) |
|
|
|
|
Gain on sale of gold mining interest in Suriname |
|
|
27.9 |
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
(13.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total significant items (pre-tax) |
|
|
(226.4 |
) |
|
|
(324.0 |
) |
|
|
(135.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total significant items (after-tax) |
|
|
(160.1 |
) |
|
|
(320.1 |
) |
|
|
(125.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
AWACs EBITDA and EBITDA excluding significant items (US GAAP)
AWACs EBITDA is defined as earnings before interest, tax, depreciation and amortisation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
|
US$m |
|
|
US$m |
|
|
US$m |
|
Net loss after tax |
|
|
(58.7 |
) |
|
|
(222.5 |
) |
|
|
(26.2 |
) |
(Subtract)/add back: Income tax (credit)/charge |
|
|
(36.1 |
) |
|
|
44.9 |
|
|
|
18.7 |
|
Add back: Depreciation and Amortisation |
|
|
211.1 |
|
|
|
212.5 |
|
|
|
234.6 |
|
Add back: Net interest |
|
|
2.9 |
|
|
|
4.1 |
|
|
|
2.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
119.2 |
|
|
|
39.0 |
|
|
|
229.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: significant items |
|
|
226.4 |
|
|
|
324.0 |
|
|
|
135.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA excluding significant items |
|
|
345.6 |
|
|
|
363.0 |
|
|
|
364.8 |
|
AWCs significant items (IFRS)
Alumina Limiteds share of net (loss)/profit of associates was negatively affected by its equity share of individually significant items incurred by AWAC.
These items are disclosed in the table to enhance an understanding of Companys operational performance during the reporting period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1H 14 |
|
|
2H 13 |
|
|
1H 13 |
|
Significant Items (post-tax) |
|
US$m |
|
|
US$m |
|
|
US$m |
|
Point Henry restructuring charges |
|
|
(78.7 |
) |
|
|
|
|
|
|
|
|
Legal matters of associate |
|
|
(2.7 |
) |
|
|
13.5 |
|
|
|
(30.0 |
) |
Anglesea statutory maintenance |
|
|
|
|
|
|
|
|
|
|
(9.0 |
) |
Gain on sale of gold mining interest in Suriname |
|
|
7.2 |
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
(3.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total significant items |
|
|
(74.2 |
) |
|
|
9.9 |
|
|
|
(39.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
28
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
Supplementary Appendix 4D
Information
Market Outlook
The demand for primary aluminium remains strong. For 2014, growth is expected to be recorded in the high single digit percentage points. Whilst there has been
a slowdown during 2014 in Chinas economic activity, where approximately half of the global aluminium production capacity is installed, demand for the metal in high growth markets such as power transmission and vehicles should keep total China
growth near double digit percentage points. For the rest of the world, and particularly in North America, a shift from steel to aluminium for the light-weighting of auto bodies as one response to enacted regulations on fuel efficiency should add to
the growth that is expected from a cyclical rebound.
Although demand for primary aluminium and hence smelter grade alumina remains robust, Australian FOB
spot prices for alumina during the first half of 2014 have declined, reaching an almost two-year low of US$307 per tonne. Continuing low aluminium prices led to a net reduction in aluminium production that was initially not matched by alumina
production curtailments, resulting in Atlantic cargoes being offered to Pacific and Middle East buyers at a discount to Australian prices.
Market
commentators currently view the global aluminium market as being in a deficit for 2014 due to the strong year-on-year demand growth combined with the recent production cuts. Global aluminium inventories are now at multi-year lows, boosting sentiment
and pushing prices to over US$2,000 per tonne. On the other hand, alumina is seen as remaining in surplus but beginning to correct as high cost Atlantic refineries curtail and China demand picks up as smelters advantaged by low local costs in
Xinjiang and Inner Mongolia provinces expand their capacity and some other smelters, such as in the Henan province, resume production induced by local power tariff subsidies.
Globally, there is overcapacity in alumina, and this is likely to continue to weigh on prices in the short term despite the expected growth in demand.
Nevertheless, short-term prices should also find support from the recent improvement in aluminium LME prices; the on-going Indonesian bauxite export ban; the closure by Rio Tinto of the Gove refinery situated in the Northern Territory of Australia
(capacity of 2.7 million tonnes per annum of alumina) and delays in new alumina capacity coming on stream such as the Lanjigarh refinery expansion in India which is due to the inability to secure bauxite supply.
Indonesia was Chinas largest supplier of imported bauxite. China represents approximately half of the global alumina refinery capacity, with
approximately 30% of Chinas refineries dependent upon imported bauxite. On 12 January 2014 the Indonesia export ban of unprocessed ores came into effect which stopped bauxite exports to China. Leading up to the ban, China built up
significant stockpiles of bauxite. Alumina capacity expansion in China has been tapering reflecting in part the increasing cost of imported bauxite and declining stockpiles. Beyond 2014, if the Indonesian ban remains in place, it is not clear from
where China will source the entirety of its growing imported bauxite needs nor at what cost. This may lead to an increase in imports of alumina by China.
Longer term, given the gap between current low alumina prices and the construction incentive price outside China, and the measures put in place by the Chinese
Government to stem the growth of over-supplied industries, the rate of net alumina capacity expansion is expected to slow and supply is expected to eventually fall behind demand. Chinas consumers of domestic bauxite are also experiencing
higher bauxite costs due to declining grades, which could eventually place additional demand upon imported bauxite and/or alumina. In addition, recent Chinese market liberalisation of process inputs such as electricity and water could lead to
higher alumina production costs.
29
ALUMINA LIMITED
HALF-YEAR ENDED 30 JUNE 2014
Supplementary Appendix 4D
Information
Forward Looking Statements
Some statements in this report are forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. Forward-looking
statements also include those containing such words as anticipate, estimates, should, will, expects, plans or similar expressions. Forward-looking statements involve risks and
uncertainties that may cause actual outcomes to be different from the forward-looking statements. Important factors that could cause actual results to differ from the forward-looking statements include: (a) material adverse changes in global
economic, alumina or aluminium industry conditions and the markets served by AWAC; (b) changes in production and development costs and production levels or to sales agreements; (c) changes in laws or regulations or policies;
(d) changes in alumina and aluminium prices and currency exchange rates; (e) constraints on the availability of bauxite; and (f) the risk factors and other factors summarised in Aluminas Form
20-F for the year ended 31 December 2013. Forward-looking statements that reference past trends or activities should not be taken as a representation that such trends or activities will necessarily
continue in the future. Alumina Limited does not undertake any obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking
statements which speak only as of the date of the relevant document.
Note regarding non-IFRS financial information
This document contains certain non-IFRS financial information. This information is presented to assist in making appropriate comparisons with prior year and
to assess the operating performance of the business. Where non-IFRS measures are used, definition of the measure, calculation method and/or reconciliation to IFRS financial information is provided as appropriate.
30
ALUMINA LIMITED
31
ALUMINA LIMITED
Diagram of Alcoa World Alumina and Chemicals (AWAC) Operations
All operations 100% owned, unless otherwise indicated
|
|
|
|
|
|
|
Australia Huntly & Willowdale
Brazil Trombetas (9.6%) & Juruti Guinea
Sangaredi (23%) Jamaica Manchester Plateau (55%)
Suriname Moengo, Klaverblad & Kaimangrassie
Saudi Arabia mine being developed (25.1%) |
|
Australia Kwinana, Pinjarra & Wagerup
Brazil Sao Luis (39%) Jamaica
Clarendon (55%) Spain San Ciprian
Suriname Suralco USA Point
Comfort Saudi Arabia refinery being developed (25.1%) |
|
Australia Point Henry & Portland (55%) |
|
Australia Kwinana
Spain San Ciprian USA Point
Comfort |
Bauxite deposits: AWACs bauxite deposits have long term mining rights. Bauxite mining is planned on an incremental basis
after detailed assessment of the deposits to achieve a uniform quality in the supply of blended feedstock to the relevant refinery.
Refineries: AWAC
operates eight alumina refineries, six of which are located in proximity to bauxite deposits.
Smelters: AWAC produces primary aluminium in Australia,
with alumina supplied by the Australian refineries.
Alumina Chemicals: AWAC produces chemical grade alumina from three refineries: Kwinana (Australia),
Point Comfort (USA) and San Ciprian (Spain).
Shipping Operations: AWACs shipping operations use owned and chartered vessels to transport dry and
liquid bulk cargoes, including bauxite, alumina, caustic soda, fuel oil, petroleum, coke and limestone.
32
ALUMINA LIMITED
Alcoa World Alumina and Chemicals (AWAC) Profit & Loss
|
|
|
|
|
|
|
|
|
|
|
|
|
US$ Millions (US GAAP) 100% |
|
1st Half 2014 |
|
|
2nd Half 2013 |
|
|
1st Half 2013 |
|
Sales |
|
|
1,795.4 |
|
|
|
1,895.1 |
|
|
|
1,875.7 |
|
Sales to Related Parties |
|
|
1,003.5 |
|
|
|
1,024.6 |
|
|
|
1,089.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
|
|
2,798.9 |
|
|
|
2,919.7 |
|
|
|
2,964.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold and Operating Expenses |
|
|
(2,396.5 |
) |
|
|
(2,507.3 |
) |
|
|
(2,581.6 |
) |
Selling, Administration, Other Expenses and R&D Expenses |
|
|
(54.7 |
) |
|
|
(61.3 |
) |
|
|
(61.9 |
) |
Provision for Depreciation, Depletion and Amortisation |
|
|
(211.1 |
) |
|
|
(212.5 |
) |
|
|
(234.6 |
) |
Restructuring and Other |
|
|
(231.4 |
) |
|
|
(316.2 |
) |
|
|
(94.3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses |
|
|
(2,893.7 |
) |
|
|
(3,097.3 |
) |
|
|
(2,972.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before Taxes |
|
|
(94.8 |
) |
|
|
(177.6 |
) |
|
|
(7.5 |
) |
(Provision)/Benefit for Taxes on Income |
|
|
36.1 |
|
|
|
(44.9 |
) |
|
|
(18.7 |
) |
Net Loss after Taxes |
|
|
(58.7 |
) |
|
|
(222.5 |
) |
|
|
(26.2 |
) |
Members Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Opening Balance at Start of Period |
|
|
6,861.7 |
|
|
|
7,521.2 |
|
|
|
8,243.7 |
|
Net Loss |
|
|
(58.7 |
) |
|
|
(222.5 |
) |
|
|
(26.2 |
) |
Capital Contribution |
|
|
65.6 |
|
|
|
|
|
|
|
31.5 |
|
Dividends Paid and Return of Capital to Partners |
|
|
(136.7 |
) |
|
|
(166.1 |
) |
|
|
(134.7 |
) |
Common Stock Issued for Compensation Plans |
|
|
2.9 |
|
|
|
1.8 |
|
|
|
3.4 |
|
Other Comprehensive Income |
|
|
374.5 |
|
|
|
(272.7 |
) |
|
|
(596.5 |
) |
Closing Balance at End of Period |
|
|
7,109.3 |
|
|
|
6,861.7 |
|
|
|
7,521.2 |
|
33
ALUMINA LIMITED
Alcoa World Alumina and Chemicals (AWAC) Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
US$ Millions (US GAAP) 100% |
|
30 June 2014 |
|
|
31 December 2013 |
|
|
30 June 2013 |
|
Cash and Cash Equivalents |
|
|
110.4 |
|
|
|
189.5 |
|
|
|
286.3 |
|
Receivables |
|
|
455.2 |
|
|
|
541.5 |
|
|
|
439.7 |
|
Related Party Notes Receivable |
|
|
83.9 |
|
|
|
91.5 |
|
|
|
86.6 |
|
Inventories |
|
|
727.6 |
|
|
|
671.2 |
|
|
|
719.6 |
|
Prepaid Expenses and Other Current Assets |
|
|
263.1 |
|
|
|
296.4 |
|
|
|
352.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Assets |
|
|
1,640.2 |
|
|
|
1,790.1 |
|
|
|
1,884.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant & Equipment |
|
|
6,009.0 |
|
|
|
5,938.3 |
|
|
|
6,301.6 |
|
Investments |
|
|
604.1 |
|
|
|
557.7 |
|
|
|
588.1 |
|
Other Assets and Deferred Charges |
|
|
1,873.5 |
|
|
|
1,786.4 |
|
|
|
1,873.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Current Assets |
|
|
8,486.6 |
|
|
|
8,282.4 |
|
|
|
8,763.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
|
10,126.8 |
|
|
|
10,072.5 |
|
|
|
10,647.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short Term Borrowings |
|
|
70.3 |
|
|
|
59.0 |
|
|
|
74.2 |
|
Payables |
|
|
828.1 |
|
|
|
881.8 |
|
|
|
938.5 |
|
Taxes Payable |
|
|
150.4 |
|
|
|
187.1 |
|
|
|
192.8 |
|
Accrued Compensation and Retirement Costs |
|
|
275.0 |
|
|
|
269.2 |
|
|
|
263.0 |
|
Other Current Liabilities |
|
|
342.1 |
|
|
|
376.6 |
|
|
|
500.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities |
|
|
1,665.9 |
|
|
|
1,773.7 |
|
|
|
1,969.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Lease Obligations and Long Term Debt |
|
|
134.4 |
|
|
|
116.9 |
|
|
|
66.3 |
|
Deferred Taxes |
|
|
178.5 |
|
|
|
237.3 |
|
|
|
193.2 |
|
Other Long Term Liabilities |
|
|
1,038.7 |
|
|
|
1,082.9 |
|
|
|
897.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-Current Liabilities |
|
|
1,351.6 |
|
|
|
1,437.1 |
|
|
|
1,157.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
3,017.5 |
|
|
|
3,210.8 |
|
|
|
3,126.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
7,109.3 |
|
|
|
6,861.7 |
|
|
|
7,521.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities & Equity |
|
|
10,126.8 |
|
|
|
10,072.5 |
|
|
|
10,647.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
ALUMINA LIMITED
Alcoa World Alumina and Chemicals (AWAC) Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
US$ Millions (US GAAP) 100% |
|
1st Half 2014 |
|
|
2nd Half 2013 |
|
|
1st Half 2013 |
|
Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
|
(58.7 |
) |
|
|
(222.5 |
) |
|
|
(26.2 |
) |
Adjustments to Reconcile Net Income to Cash from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, Amortisation and Impairment |
|
|
211.1 |
|
|
|
212.5 |
|
|
|
234.6 |
|
Other Items* |
|
|
(70.9 |
) |
|
|
251.6 |
|
|
|
206.0 |
|
Cash from Operating Activities |
|
|
81.5 |
|
|
|
241.6 |
|
|
|
414.4 |
|
Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Paid & Return of Capital to Partners |
|
|
(136.7 |
) |
|
|
(198.5 |
) |
|
|
(72.2 |
) |
Change in Debt |
|
|
29.6 |
|
|
|
35.4 |
|
|
|
4.6 |
|
Changes to Capital Lease Obligations |
|
|
(0.8 |
) |
|
|
|
|
|
|
(2.4 |
) |
Capital Contribution |
|
|
65.6 |
|
|
|
|
|
|
|
31.5 |
|
Cash Generated/(Used) for Financing Activities |
|
|
(42.3 |
) |
|
|
(163.1 |
) |
|
|
(38.5 |
) |
Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditure |
|
|
(88.9 |
) |
|
|
(144.4 |
) |
|
|
(178.2 |
) |
Net Changes in Related Party Note Receivable |
|
|
12.4 |
|
|
|
(33.9 |
) |
|
|
17.8 |
|
Other |
|
|
(49.1 |
) |
|
|
(3.0 |
) |
|
|
(32.7 |
) |
Cash Used for Investing Activities |
|
|
(125.6 |
) |
|
|
(181.3 |
) |
|
|
(193.1 |
) |
Effect of Exchange Rate Changes on Cash |
|
|
7.3 |
|
|
|
6.0 |
|
|
|
(22.5 |
) |
Cash (Used)/Generated |
|
|
(79.1 |
) |
|
|
(96.8 |
) |
|
|
160.3 |
|
Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents at Beginning of Period |
|
|
189.5 |
|
|
|
286.3 |
|
|
|
126.0 |
|
Cash and Cash Equivalents at End of Period |
|
|
110.4 |
|
|
|
189.5 |
|
|
|
286.3 |
|
Net Change in Cash and Cash Equivalents |
|
|
(79.1 |
) |
|
|
(96.8 |
) |
|
|
160.3 |
|
* |
Other Items consists of net movement in working capital and other non-current assets and liabilities |
35
ALUMINA LIMITED
Reconciliation of AWACs Profit to Alumina Limited Share of AWACs
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Half 2014 |
|
|
2nd Half 2013 |
|
|
1st Half 2013 |
|
AWAC Loss before tax (US GAAP) |
|
|
(94.8 |
) |
|
|
(177.6 |
) |
|
|
(7.5 |
) |
Adjust for IFRS |
|
|
|
|
|
|
|
|
|
|
|
|
- Embedded derivatives |
|
|
12.7 |
|
|
|
(17.3 |
) |
|
|
0.8 |
|
- Restructuring charges |
|
|
(27.4 |
) |
|
|
|
|
|
|
|
|
- Reversal of goodwill impairment |
|
|
|
|
|
|
30.2 |
|
|
|
|
|
- Alba provision |
|
|
|
|
|
|
(28.0 |
) |
|
|
28.0 |
|
- Other |
|
|
(1.9 |
) |
|
|
(9.2 |
) |
|
|
(2.8 |
) |
AWAC (Loss)/Profit before Tax (IFRS) |
|
|
(111.4 |
) |
|
|
(201.9 |
) |
|
|
18.5 |
|
|
|
|
|
AWAC Tax (US GAAP) |
|
|
36.1 |
|
|
|
(44.9 |
) |
|
|
(18.7 |
) |
Adjust for IFRS |
|
|
|
|
|
|
|
|
|
|
|
|
- Brazil deferred tax |
|
|
|
|
|
|
(40.3 |
) |
|
|
38.2 |
|
- Other |
|
|
(1.5 |
) |
|
|
5.2 |
|
|
|
0.3 |
|
AWAC Tax (IFRS) |
|
|
34.6 |
|
|
|
(80.0 |
) |
|
|
19.8 |
|
|
|
|
|
AWAC (Loss)/Profit before Tax (IFRS) |
|
|
(111.4 |
) |
|
|
(201.9 |
) |
|
|
18.5 |
|
AWAC Tax (IFRS) |
|
|
34.6 |
|
|
|
(80.0 |
) |
|
|
19.8 |
|
AWAC (Loss)/Profit after Tax (IFRS) |
|
|
(76.8 |
) |
|
|
(281.9 |
) |
|
|
38.3 |
|
|
|
|
|
Alumina Limited Share of Equity (Loss)/Profit after Tax |
|
|
(30.7 |
) |
|
|
(112.7 |
) |
|
|
15.3 |
|
36
|
|
|
ASX Announcement |
|
21 August 2014 |
Alumina Limited 2014 Half-Year Result Presentation
Attached is a presentation relating to Alumina Limiteds Half-Year Results for the six months ended 30 June 2014.
|
/s/ Stephen Foster |
Stephen Foster |
Company Secretary |
|
21 August 2014 |
|
|
|
|
|
Alumina Limited |
|
|
|
|
ABN 85 004 820 419 |
|
|
|
|
GPO Box 5411 |
|
|
Melbourne Vic 3001 |
|
|
Australia |
|
|
|
|
Level 12 IBM Centre |
|
|
60 City Road |
|
|
Southbank Vic 3006 |
|
|
Australia |
|
|
|
|
Tel +61 (0)3 8699 2600 |
|
|
Fax +61 (0)3 8699 2699 |
|
|
Email info@aluminalimited.com |
Alumina Limited
2014 Half
Year Results
Peter Wasow
Chief Executive Officer
Chris Thiris
Chief Financial Officer
Disclaimer
This
presentation is not a prospectus or an offer of securities for subscription or sale in any jurisdiction. Some statements in this presentation are forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of
1995. Forward-looking statements also include those containing such words as anticipate, estimates, should, will, expects, plans or similar expressions. Forward-looking statements
involve risks and uncertainties that may cause actual outcomes to be different from the forward-looking statements. Important factors that could cause actual results to differ from the forward-looking statements include: (a) material adverse changes
in global economic, alumina or aluminium industry conditions and the markets served by AWAC; (b) changes in production and development costs and production levels or to sales agreements; (c) changes in laws or regulations or policies; (d) changes in
alumina and aluminium prices and currency exchange rates; (e) constraints on the availability of bauxite; and (f) the risk factors and other factors summarised in Aluminas Form 20-F for the year ended 31 December 2013.
Forward-looking statements that reference past trends or activities should not be taken as a representation that such trends or activities will necessarily continue in the future.
Alumina Limited does not undertake any obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements which speak
only as of the date of the relevant document.
This presentation contains certain non-IFRS financial information. This information is presented to assist in making
appropriate comparisons with prior year and to assess the operating performance of the business. Where non-IFRS measures are used, definition of the measure, calculation method and/or reconciliation to IFRS financial information is provided as
appropriate.
2
Part 1:
Alumina Limited
and AWAC
1H 2014
Alumina Limited & AWAC
Alumina Limited
US$m (IFRS) 1H14 2H13 1H13
(NLAT)/NPAT (47.4) 2.9 (2.4)
Significant Items:
- Legal matters of associates (after-tax) (2.7) 13.5 (30.0)
- Point Henry restructuring
(after-tax) (78.7) - -
- Other significant items (after-tax)* 7.2 (3.6) (9.0)
NPAT/(NLAT) excl significant items 26.8 (7.0) 36.6
Net Debt 130.0 135.2 197.2
AWAC
US$m (US GAAP) 1H14 2H13 1H13
EBITDA 119.2 39.0 229.8
Significant Items:
- Legal matters of associates (pre-tax) - (281.0) (103.0)
- Point Henry restructuring
(pre-tax) (254.3) - -
- Other significant items (pre-tax)* 27.9 (43.0) (32.0)
EBITDA excluding significant items 345.6 363.0 364.8
Cash dividends,
distributions and 136.7 198.5 72.2
capital returns
Alumina Limited:
Results include significant items:
- most are non-cash
- largest being Point Henry restructuring
$26.8m net profit excluding significant items
No dividend declared
AWAC:
$345.6m EBITDA excluding significant items
Dividends, distributions and capital returns in
line with past periods
(*) Other includes: sale of gold mining interest in Suriname, asset write-offs and Anglesea statutory maintenance
4
AWAC performance bridge
US GAAP (US$m)
230
135
(166)
166
7
(27)
(226)
119
H1 2013 Prior Year Revenue COGS and Selling, Other Current Year H1 2014
EBITDA One-off Operating Admin, One-off EBITDA
Items(1) expenses R&D
Items(2)
39
324
(122)
124
7
(27)
(226)
119
H2 2013 Prior Year Revenue COGS & Selling, Other Current Year H1 2014
EBITDA One-off Operating Admin, One-off EBITDA
Items(3) Expenses &
R&D Items(2)
Performance in line with prior periods
Revenue largely
affected by lower alumina prices and shipments
COGS, etc lower mainly due to:
- stronger US dollar, especially against 1H13 - lower alumina shipments - productivity initiatives and cost control
Currency movements 1H14 2H13 1H13
USD/AUD average 0.9148 0.9215 1.0150
BRL/USD average 2.2949 2.2818 2.0326
Source: Thomson Reuters
(1) Reversal of: $103m Alba legal matter & $32m Anglesea statutory maintenance (2) Comprises: $254m Point Henry restructuring & ($28m) sale of gold mining interest in
Suriname (3) Reversal of: $281m Alba legal matter, $30m goodwill impairment of Eastern Aluminium Ltd and $13m asset write offs
5
AWAC alumina realised price(1)
(2)
Average Realised Price Per Tonne (basic units)
100.0
(2.4)
(4.7)
2.0
94.9
1H13 API / Legacy Mix 1H14
Spot Price LME Price
1.6 100.6 100.0 0.2 (1.2)
2H13 API / Legacy LME Price Mix 1H14
Spot Price
Benefit from pricing conversion
API/spot prices outperformed LME linked prices
c.63% smelter grade shipments priced on API/spot in 1H14
Favourable mix variance against
legacy contracts
Market prices (US$ per tonne) 1H14 2H13 1H13
Ave alumina
spot, one month lag(3) 325 319 334
Ave 3-month LME, two month lag(4) 1,782 1,845 2,010
Source: (3) Platts
(4) Thomson Reuters
Spot/LME% 18.2% 17.3% 16.6%
(1) Third party smelter grade alumina.
(2) Chart depicts variances based off legacy contract terms
6
Pricing of smelter grade alumina
Spot vs LME (basic units indexed)*
110 100 90 80
1-Jan-13 1-Apr-13 1-Jul-13 1-Oct-13 1-Jan-14 1-Apr-14 1-Jul-14
Platts alumina - FOB Australia
prices LME aluminium (3-month)
AWAC Pricing Transition
85%
65%
46%
35%
30%
15%
35%
54%
65%
70%
80+%
2011 2012 2013 2014F 2015F 2016F
Portion SGA shipments on LME/other pricing
basis
Portion SGA shipments on alumina spot or index pricing basis
Spot
outperformed LME
Both supported by improving fundamentals
Transition to spot
basis continues
At least 80% in 2016
* Sources: Alumina, Platts Alumina (FOB
Australia) July 2014, LME Aluminium: Thomson Reuters July 2014
7
AWAC cash cost of alumina production
Cost of Alumina Production Per Tonne (basic units)(1)
100.0
(0.5)
(1.7)
0.3
(2.8)
95.3
1H13 Energy Caustic Bauxite Conversion 1H14
100.0
1.6
(0.9)
(0.1)
0.5
101.1
2H13 Energy Caustic Bauxite Conversion 1H14
Reflects currency, cost control,
productivity
Benefits from strong US dollar
Higher energy prices also offset
by productivity
Productivity continues in other areas
Alumina EBITDA currency
sensitivities 2014F
AUD impact of +$0.01 to the USD/AUD c.($1.40/t)
BRL
impact of +$0.01 to the BRL/USD c.$0.10/t
(1) Defined as direct materials and labour, energy, indirect materials, indirect expenses, excluding depreciation.
Movements can relate to usage, unit costs or combination of both, timing of maintenance, seasonal factors, levels of production and the number of production days and refinery mix
8
AWAC alumina production
1H14 Production (kt)
8,000 6,000 4,000 2,000
0
4,590
698
760
572
359
911
Australia Brazil Spain Suriname Jamaica US
Guidance remains at 16mt for 2014
Production was c.93% of nameplate capacity
Change by Region (kt)
7,756
84
31
(18)
7
14
16
7,890
42.9kt per day
43.6kt per day
1H13 Australia Brazil Spain Suriname Jamaica US 1H14
8,053
(86)
(4)
(36)
(13)
(3)
(21)
7,890
43.8kt per day
43.6kt per day
2H13 Australia Brazil Spain Suriname Jamaica US 1H14
9
AWAC free cash flow & capex
Free Cash Flow(1)
US$m (US GAAP) 1H14 2H13 1H13
Cash from operations 81.5 241.6 414.4
Capital expenditure
- Sustaining (85.9) (137.6) (155.5)
- Growth (3.0) (6.8) (22.7)
Free cash flow (7.4)(2) 97.2 236.2
Positive operating cash flows
Includes Alba related payment funded by debt
Otherwise $169.5m cash from operations
- $80.6m free cash flow
Includes gain from sale of Suriname gold mining
interest
Capex guidance for 2014
$260m for sustaining
- includes San Ciprian gas conversion
- most of 1H14 relates to Australia
- Atlantics weighted towards 2H14
$10m for growth
(1) Free cash flow defined as cash from operations less capital expenditure
(2) Includes an
Alba related payment of $88.0 million that was funded by a term loan
10
Alumina Limited 1H 2014 results
Profit and Loss
US$m (IFRS) 1H14 2H13 1H13
Share of AWAC (Loss)/Profit (30.7) (112.7) 15.3
Other Income(1) - 137.1 -
General & Admin. Costs (6.4) (9.6) (7.6)
Finance Costs (6.9) (13.8) (11.5)
Other & Tax (3.4) 1.9 1.4
Net (Loss)/Profit After Tax (47.4) 2.9 (2.4)
NPAT/(NLAT) excl significant items 26.8 (7.0) 36.6
Free Cash Flow(2)
US$m (IFRS) 1H14 2H13 1H13
Dividends and distributions received 2.6 78.4 28.9
Costs (Interest, corporate, other) (15.3) (20.9) (18.9)
Cash from Operations (12.7) 57.5 10.0
Net Proceeds/(Payments) to 19.6 3.0 (12.0)
Investments in Associates
Free Cash Flow 6.9 60.5 (2.0)
Significant Items (after tax)
IFRS US$m 1H14 2H13 1H13
Point Henry restructuring charges (78.7) - -
Legal matters of associate (2.7) 13.5 (30.0)
Anglesea statutory maintenance - - (9.0)
Gain on sale of gold mining 7.2 - -
interest in Suriname
Other - (3.6) -
Total significant items (74.2) 9.9 (39.0)
NPAT $26.8m excluding significant items
Largest significant item relates to Point Henry
restructuring
Lower overheads and finance costs
Positive free cash flow
Includes $54.2m AWAC receipts
$32.0m invested in Maaden and San Ciprian
(1) Other Income of $137.1 million (representing 25% of the total Alba related charges) recognised in the Profit or Loss.
(2) Free cash flow defined as cash from operations less net investments in associates
11
Alumina Limited net debt & facilities
Net Debt Changes (US$m)
135 15 (3) (52) 32 3 130
Net Debt 31/12/13 AWC Corp & Finance Costs AWAC dividends & distributions AWAC returns on Invested Capital Payments to investments In Associates Exchange rate effect Net
Debt 30/06/14
Debt Maturity Profile 30/06/14 (US$m)
250 200 150 100 50
0
2014 2015 2016 2017
BNDES - Drawn Banks - Drawn Banks - Undrawn
Net debt lower
Gearing is 4.3%(1)
$22.2m net AWAC receipts
Sufficient available facilities
$300m of committed bank facilities
$105m BNDES loan
(1) Calculated as (debt cash)/(debt + equity)
12
Point Henry smelter
Point
Henry closed in August 2014
US$m (after tax) 1H14 2H14 2014 Thereafter Total
(Act) (Est) (Est) (Est) (Est)
AWAC Restructuring Charges (IFRS) 196.7 43.3
240.0 10.0(1) 250.0
AWAC Restructuring Cash Flows (5.1) 55.1 50.0 70.0(2) 120.0
(1) Balance relates to holding costs net of scrap proceeds
(2) Balance
relates to demolition, environmental, holding costs, net of scrap proceeds
13
Outlook 2H 2014
AWAC
Start with lower alumina prices and positive outlook for later in the
half
Similar production costs (subject to currency and energy)
c.$43m (IFRS
after tax) AWAC charges relating to Point Henry
c.$55m AWAC payments (net of tax) relating to Point Henry
US GAAP AWAC charge relating to change in Brazil tax (no impact under IFRS)
Additional AWAC
charges relating to Maadens pre-operational costs (1H 2014: $15m)
Alumina Limited
Maaden equity calls of $11m
Expect additional San Ciprian calls for working capital and
gas conversion
Receipts from AWAC expected to be not significantly different to 2013, subject to market
14
Part 2:
Industry dynamics
and AWAC strategy
Key themes
Industry
context improving
Demand pull
Cost push
Competitive advantage
AWACs leading position
AWAC strategy delivering
Alumina Limited leverage
Strong demand growth 7% CAGR over medium term
Refining capacity issues in medium term
China: Cost and availability of imported bauxite
Declining domestic
bauxite grades
RoW: Long construction lead times
Lack of financial
incentive
Basis of competition shifting to bauxite access
16% of global
production near lowest quartile of cost
Abundant bauxite resources
Long life,
large scale, low cost refineries
De-link alumina pricing: at least 80% by 2016
Further improve cost position: down to 21st percentile by 2016
Unique pure
investment in upstream
Well positioned for future recovery in pricing
Strong
capital structure
16
Demand for metallurgical alumina
Forecast aluminium demand growth will drive alumina and bauxite demand growth
(million mtons)
140
120
100
80
60
40
20
0
2013
2014f
2015f
2016f
2017f
7% CAGR (Global)
5.5% CAGR (Global, excluding China)
9% CAGR (China)
RoW
OTHER ASIA
MIDDLE EAST
CHINA
Growth requires additional ~80m tonnes per annum of bauxite by 2017(1)
Source: Global Alumina
demand, Harbor Aluminium, August 2014
(1) Alumina Limited estimate based on average 2.5 tonnes of bauxite per tonne of alumina
17
Chinas shorter term bauxite issues
ROW supply has been insufficient to replace Indonesia volumes
Imported bauxite volumes and
price by country(1)
Indonesia
Australia
India
Jamaica
Fiji
Dominic Rep.
Brazil
Ghana
Guinea
Guyana
Malaysia
Bauxite Price, $/t
85 75 65 55 45 35
Nov/12
Mar/13
Jul/13
Nov/13
Mar/14
Jul/14
Scale: 1 million tonne
Chinese bauxite inventories
Bx Inventory Mln tonnes
45 30 15 0
Port (LHS)
Refineries (LHS)
Total Weeks (RHS)
Apr/11
Oct/11
Apr/12
Oct/12
Apr/13
Oct/13
Apr/14
60 50 40 30 20 10 0
Source: CM Group with China Customs Data, July 2014
(1) Prices CIF Shandong, non-ViU adjusted
18
China bauxite costs rising
ViU adjusted bauxite import costs into China have been rising
Landed cost of
imported bauxite and CBIX
US$/t
100 90 80 70 60 50 40 30
Jan/12 Jul/12 Jan/13 Jul/13 Jan/14 Jul/14
Australia
Indonesia
India
Brazil
Ghana
Guinea
CBIX
CBIX is an index of the weighted average value-in-use adjusted prices for bauxite imports into China (based on 5% silica (reacting), 10% moisture and 50% alumina (reacting))
Higher bauxite costs could lead to higher alumina production costs
Source: CM
Group with China Customs Data, July 2014. ViU means Value in Use, a price which has been adjusted to a constant quality
19
Indonesian bauxite industry update
Significant resources exist in West Kalimantan, but
Mine site and washery tailings, West
Kalimantan
Remediated bauxite mine site, West Kalimantan
any
resumption may require a new level of expenditure on sustainability
Photos: Alumina Ltd management site visit, West Kalimantan, July 2014
20
Indonesian ban a likely positive for alumina prices
Scenarios
Chinese Import Bauxite Price Up? (1)
Alumina Prices Up? (1)
Bauxite export ban holds, no refineries built
Chinese bauxite stockpiles will deplete during 2015
Greenfields refinery (earliest 2016), no
bauxite exports
Limited volume bauxite exports (earliest likely 2015)
whether
permitted due to:
i. corresponding alumina production from a new refinery;
ii. some value adding beneficiation to bauxite; or
iii. some policy
relaxation
Unlimited volume bauxite exports (unlikely near term)
likely to be at higher cost and lower than historical average volume due to:
i. expected higher tax (up to 50%?)
ii. higher transport costs to river/coast
iii. competing land use costs
iv. greater sustainability costs (social and
environmental)
Even at (unsustainable) historical peak levels, Indonesian supply post 2018/2019 could increasingly fall short of Chinas needs
(1) Other factors remaining constant. Ticks indicate Alumina Limiteds assessment of relative impact
21
Chinas longer term bauxite issues
Declining grade and allocation system increases costs
Declining bauxite quality in key alumina
producing provinces
Alumina/Silica of Bauxite
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2006 2007 2008 2009 2010 2011 2012 2013 2014
Henan Shanxi
Alumina/Silica ratio is a key determinant of bauxite quality
Historical pure Bayer process
economic limit above 5.0
ViU adjusted bauxite prices
US$/t
80
60
40
20
Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14
Henan Shanxi
Indonesian - Shandong Australian - Shandong
ViU reflects grade, logistics & processing costs
ViU rising faster than costs to
mine, reflecting A/S ratio
Source: Left hand side: CM Group, August 2014
Right hand side: Chinese Imported Bauxite Cost, CM Group with China Customs Data, July 2014
22
China refinery cash cost curve
Chinas marginal refineries facing bauxite supply and cost pressures
US$/t
500 Bauxite Caustic Energy Others
450
400 Guangxi Shanxi Guizhou Yunnan Henan Chongqing Shandong IM
350 CMAAX excl. VAT (Jun-14)
300 CMAAXSouth excl. VAT (Jun-14)
250
200
150
100
50
0
0% 25% 50% 75% 100%
Cumulative Production - %
3100
2790
2480
2170
1860
1550
1240
930
620
310
0
RMB/t
Marginal producers dependent on bauxite imports
Deteriorating domestic bauxite grades and allocation issues
should lead to increased
bauxite/alumina imports
Cost of refining likely to increase due to bauxite cost increases, need to watch energy costs
Henan & Shanxi are forecast to face similar issues due to worsening bauxite quality
Source: China refinery cash cost curve by province, excluding VAT, CM Group, July 2014
23
China alumina pricing arbitrage
China impacts RoW alumina price through pricing arbitrage
US$/t
180
160
140
120
100
80
60
40
20
0
-20
-40
-60
-80
-100
-120
-140
Jan-11 Jul-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14
Total alumina imports Import Premium
2,000
1,500
1,000
500
0
Alumina imports, kt
RoW price should reflect Chinas demand growth and bauxite challenges
Chinas
internal alumina price mainly reflects
demand-supply balance;
marginal cost of production
China growth in alumina demand above RoW
Rising
bauxite costs adds to cost of alumina
could increase internal asking price
could reduce internal production
Bauxite shortages may increase alumina imports
RoW price should reflect Chinas demand growth and bauxite challenges
Source: China imports of alumina and CMAAX vs Aust FOB adjusted, CM Group, July 2014
24
Part 3:
AWACs
position in the
industry and strategy
AWAC: global leader in bauxite and alumina
AWAC is premier owner & operator of tier 1 bauxite mines and alumina refineries
Bauxite
mines Refineries Smelters Location
San Ciprian
Maaden
Guinea
Kwinana
Huntly
Pinjarra
Willowdale
Wagerup
Portland
Point Henry
Point Comfort
Jamalco
Suralco
Trombetas
Sao Luis
Juruti
AWAC is well positioned with long-life mines and nearly all AWAC mines are integrated with its refineries
AWAC mined c.40m tonnes (equity share) of bauxite in 2013
As bauxite prices increase, the
relative cost advantage of AWACs position improves
(1) Greenfield project that is expected to begin production in the fourth quarter of 2014
(2) AWAC is a joint venture between Alumina Limited (40%) and Alcoa Inc (60%)
26
AWACs alumina shipments
AWAC is a significant supplier of alumina to third party customers
Proportion of AWAC third
party sales in 1H14
36% to Alcoa
64% to 3rd parties
25%of 3rd party market
AWAC Sales
Global 3rd party sales
Global third party metallurgical alumina demand growth forecasts
(million mtons)
70
60
50
40
30
20
10
0
2013 2014f 2015f 2016f 2017f
ROW CHINA
Estimated 9% CAGR
China represents 10% CAGR
RoW represents 7% CAGR
Third party demand is forecast to grow faster than total market
Source: Right hand side chart: 3rd Party alumina demand forecasts, Harbor Aluminium, August 2014
27
AWACs pricing strategy
API pricing basis allows increased upstream rent capture
85% 65% 46% 35% 30%
15% 35% 54% 65% 70% 80%+
2011 2012 2013 2014f 2015f 2016f
Portion of AWAC third party metallurgical alumina shipments on LME/other pricing basis
Portion
of AWAC third party metallurgical alumina shipments on alumina spot or index pricing basis
28
AWACs cost strategy
Increase relative cost advantage
Targeting 21st Percentile by 2016
-9% points by 2016
2013: 27th Percentile
2010: 30th Percentile
2016: 21st Percentile
$/MT 500 450 400 350 300 250 200 150 100 50 0
0 10 20 30 40 50 60 70 80 90 100
Production (MMT)
Continue to capture productivity improvements
- San Ciprian gas conversion to be completed in 4Q 2014
- cash costs of alumina production per
tonne down by 4.7% since 1H 2013
Continue to optimize portfolio
- LOI for
sale of Jamalco
- 1.2 mtpa capacity curtailed
- record first half production
by low cost
Australian refinery system
- low cost Maaden mine and
refinery first alumina in 4Q 2014
Source: Alcoa Inc 2nd Quarter Earnings slide pack, 8 July 2014
29
Maaden on target for 2014 production
4m tonnes per annum bauxite mine & 1.8m tonnes per annum alumina refinery
AWAC has 25.1%
interest in mine and refinery only
Bauxite Mine: ~70% complete*
- first Saudi
Arabia bauxite in 2Q14
Alumina Refinery: ~95% complete*
- refinery online
4Q14
Expected to be one of the lowest cost refineries in the AWAC portfolio
*
As at July 2014
30
Part 4:
Conclusion
Key themes
Industry
context improving
Demand pull
Cost push
Competitive advantage
AWACs leading position
AWAC strategy delivering
Alumina Limited leverage
Strong demand growth 7% CAGR over medium term
Refining capacity issues in medium term
- China: Cost and availability of imported bauxite
Declining domestic bauxite
grades
- RoW: Long construction lead times
Lack of financial incentive
Basis of competition shifting to bauxite access
16% of global production near
lowest quartile of cost
Abundant bauxite resources
Long life, large scale,
low cost refineries
De-link alumina pricing: over 80% by 2016
Further improve
cost position: down to 21st percentile by 2016
Unique pure investment in upstream
Well positioned for future recovery in pricing Strong capital structure
32
Alumina Limited 2014 Half Year Results
Peter Wasow
Chief Executive Officer
Chris Thiris
Chief Financial Officer
Appendices:
- Alumina
Limited & AWAC
- Refining cash cost curve
- Alumina price drivers
Global refining cash cost curve
AWAC has long-life, large-scale mines & is a low cost alumina producer
$/mton of
alumina
500
430
360
290
220
150
1ST QUARTILE 2ND QUARTILE 3RD QUARTILE 4TH QUARTILE
Nalco $174
Noranda $224
China Power Investment $231
Glencore $241
AWAC $249
BHP $254
Chalco $261
RTA $270
Hindalco $274
Hydro Aluminum $279
UC Rusal $339
Eurasian Natural Resources Corp $347
Vimetco $388
Vinacomin $172
CVG Bauxilum** $158
Vedanta $267
Mytilineos Group $275
Shandong Weiqiao $366
Shandong Chinping Xinfa $367
0 25 50 75 100 % capacity
Source: Global metallurgical alumina refining output cash cost curve
1Q14, Harbor Aluminium, July 2014.
*Excludes applicable VAT of 17% that Chinese alumina refiners pay on raw materials, energy and services. **Assuming production
at full capacity
35
AWACs underlying business
Owner & operator of bauxite mines and alumina refineries
AWACs(1) Underlying
Businesses
Alcoa (60%)
Alumina Limited (40%)
Alcoa of Australia
International Entities
AWAC Global Operations(2)
Location
Bauxite Mines(3)
Alumina Refineries
Aluminium Smelters
Australia
Huntly & Willowdale
Kwinana, Pinjarra & Wagerup
Portland (55%)
Suriname
Lelydorp, Moengo, Klaverblad & Kaimangrassie
Paranam -
Brazil Trombetas (9.6%) & Juruti Sao Luis (Alumar) (39%) -
Jamaica* Manchester Plateau
(55%) Clarendon (55%) -
Guinea Sangaredi (23%) - -
USA - Point Comfort -
Spain - San Ciprian -
Saudi Arabia Al Baitha (Maaden), 25.1% Ras
al Khair (Maaden), 25.1% -
(1) AWAC is a JV comprised of a number of companies, including Alcoa of Australia which owns and operates the Australian assets
(2) AWAC also owns and operates a shipping business which provides transport for AWACs alumina business and 3rd parties
(3) AWAC has other bauxite exploration interests. * Note potential sale of Jamalco - refer to ASX announcement on 16 June 2014
36
AWACs refinery capacity
Currently operating at c.93% of nameplate capacity(1)
Country
Refinery
Ownership
AWAC share of nameplate (MTPY) capacity
Percentage of AWAC total nameplate capacity
Australia
Kwinana Pinjarra Wagerup
AWAC 100%
2.2 4.2 2.6 52%
Brazil
Alumar
AWAC (39%)
Rio Tinto Alcan Inc (10%)
Aluminio (15%)
BHP Billiton (36%)
1.4 8%
Jamaica
Jamalco
AWAC (55%)
Alumina Production Ltd
(Government of Jamaica) (45%)
0.8 5%
Spain
San Ciprian
AWAC 100%
1.5 9%
Suriname
Suralco
AWAC 100%
2.2 13%
US
Point Comfort
AWAC 100%
2.3 13%
Total 17.2 100%
Worlds largest alumina producer
Low cash cost producer
Refineries in Australia, Brazil, Jamaica and Suriname are integrated with mines
Additional
c.450,000 tonnes once Maaden is completed
(1) Nameplate capacity is an estimate based on design capacity and normal operating efficiencies and does not
necessarily represent maximum possible production. Excludes (i) additional creep opportunities and (ii) potential impact of sale of Jamalco (refer to ASX announcement on 16 June 2014)
37
Short term drivers on alumina market
Alumina spot price reflects fundamentals
Jan-June 2012
Chinese imports spike
China bauxite shortages, cuts alumina
High Chinese alumina prices make Aust attractive
(Apr-Aug) - Caustic price spike
(Jan-Mar) -LME Al jumps $300/t
Jun-Jul 2012
Atlantic surplus (smelter curtailments)
Atlantic discounted by $10/t to Australia
Brent crude falls $31/bbl (May-June)
LME Al drops nearly $500/t (March-June)
Aug-Dec 2012
Atlantic surplus evaporates
India, Guinea, Jamaica cut alumina output
Chinese buyers absorb Atlantic longs
Brent crude regains $28/bbl June-August
Sep 2012-Feb 2013
Caustic soda weakens
Jan-Feb 2013
Queensland (floods) shortages
Gove closure concerns
Mar-Apr 2013
Australia normalizes, supply worries ease
Low Chinese prices (importers resell contracted cargoes)
LME Al pressured by macroeconomic
woes
Apr-Jul 2013
Gove cut, port delays lift price
Smelter cuts (India, Malaysia)
Vedanta restarts alumina
China imports fall, reselling
LME Al falls to 4-year low
Alunorte refinery cuts
Aug-Oct 2013
Smelter cuts (US, Russia, Brazil)
Atlantic cargoes
Weather delays (Bunbury, Kwinana)
Nov 2013 to Jan 14
Gove refinery suspension announced
Indonesian bauxite export ban implemented
Smelter restarts (Saudi Arabia, Malaysia)
Smelter capacity reviews (Europe, US, South Africa)
Pre-Chinese New Year lull period
Jan to April 2014:
Smelter cuts in China, domestic alumina prices decline
Atlantic surplus overspills into China,
Middle East
SHFE front month Al contract declined to Yuan 12,575/mt in March (compared to cf Yuan 14,610 a year ago)
May to August 2014:
Alumina long globally
Low LME, SHFE aluminum prices weaken alumina demand
Qingdao port trade financing probe raises
cost of credit in China, further weakens demand for Australian alumina
High port stocks in China
From late July, traders build long positions, anticipate Q4 restocking
From late July, LME
aluminum holds above $2,000, strengthens alumina demand
Smelter restarts in southern China in July
Platts alumina, FOB Australia (US$/t)
360 330 300
1-Jan-12 1-Jul-12 1-Jan-13 1-Jul-13 1-Jan-14 1-Jul-14
Source: Platts, August 2014
38
ALUMINA LIMITED
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ASX Announcement |
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9 May 2014 |
Alumina Limited 2014 AGM Voting Result
As required by ASX Listing Rule 3.13.2 and section 251AA of the Corporations Act 2001, the following statistics are provided in respect to each item of
business considered by members at the Companys Annual General Meeting held on 9 May 2014.
The results of voting on each motion is as follows:
ORDINARY BUSINESS
Item 2. To adopt the
Remuneration Report (non-binding vote).
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Votes where the proxy directed to vote for the motion |
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1,706,064,059 |
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Votes where the proxy was directed to vote against the motion |
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226,475,262 |
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Votes where the proxy may exercise a discretion how to vote |
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45,968,255 |
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In addition, the number of votes where the proxy was directed to abstain from voting on the motion was |
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107,707,977 |
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The motion was carried as an ordinary resolution (non- binding vote) on a poll. The results were:
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The number of votes cast for the motion |
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1,753,076,462 |
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The number of votes cast against the motion |
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226,718,493 |
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The number of votes which abstained from voting |
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107,753,248 |
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Alumina Limited |
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ABN 85 004 820 419 |
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GPO Box 5411 |
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Melbourne Vic 3001 |
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Australia |
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Level 12 IBM Centre |
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60 City Road |
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Southbank Vic 3006 |
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Australia |
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Tel +61 (0)3 8699 2600 |
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Fax +61 (0)3 8699 2699 |
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Email info@aluminalimited.com |
Item 3a. To re-elect Mr G John Pizzey as a director
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Votes where the proxy directed to vote for the motion |
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1,877,565,595 |
Votes where the proxy was directed to vote against the motion |
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175,099,834 |
Votes where the proxy may exercise a discretion how to vote |
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45,989,469 |
In addition, the number of votes where the proxy was directed to abstain from voting on the motion was |
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1,882,101 |
The motion was carried as an ordinary resolution on a poll. The results were:
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The number of votes cast for the motion |
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1,924,733,107 |
The number of votes cast against the motion |
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175,308,977 |
The number of votes which abstained from voting |
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1,891,301 |
Item 3b. To elect Mr W Peter Day as a director
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Votes where the proxy directed to vote for the motion |
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1,899,765,002 |
Votes where the proxy was directed to vote against the motion |
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152,842,271 |
Votes where the proxy may exercise a discretion how to vote |
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46,007,439 |
In addition, the number of votes where the proxy was directed to abstain from voting on the motion was |
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1,926,317 |
The motion was carried as an ordinary resolution on a poll. The results were:
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The number of votes cast for the motion |
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1,947,163,340 |
The number of votes cast against the motion |
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152,845,558 |
The number of votes which abstained from voting |
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1,928,517 |
Item 3c. To elect Mr Michael P Ferraro as a director
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Votes where the proxy directed to vote for the motion |
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1,899,705,435 |
Votes where the proxy was directed to vote against the motion |
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152,904,794 |
Votes where the proxy may exercise a discretion how to vote |
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45,965,139 |
In addition, the number of votes where the proxy was directed to abstain from voting on the motion was |
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1,964,008 |
The motion was carried as an ordinary resolution on a poll. The results were:
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The number of votes cast for the motion |
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1,947,054,934 |
The number of votes cast against the motion |
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152,907,620 |
The number of votes which abstained from voting |
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1,973,208 |
Item 4. Grant of Performance Rights to Chief Executive Officer
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Votes where the proxy directed to vote for the motion |
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2,017,828,397 |
Votes where the proxy was directed to vote against the motion |
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19,597,004 |
Votes where the proxy may exercise a discretion how to vote |
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45,733,573 |
In addition, the number of votes where the proxy was directed to abstain from voting on the motion was |
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17,356,225 |
The motion was carried as an ordinary resolution on a poll. The results were:
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The number of votes cast for the motion |
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2,064,834,439 |
The number of votes cast against the motion |
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19,632,828 |
The number of votes which abstained from voting |
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17,389,425 |
Item 5. Alterations to the Constitution
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Votes where the proxy directed to vote for the motion |
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2,038,213,169 |
Votes where the proxy was directed to vote against the motion |
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12,875,659 |
Votes where the proxy may exercise a discretion how to vote |
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46,360,993 |
In addition, the number of votes where the proxy was directed to abstain from voting on the motion was |
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3,090,917 |
The motion was carried as a special resolution on a poll. The results were:
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The number of votes cast for the motion |
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2,085,992,245 |
The number of votes cast against the motion |
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12,883,720 |
The number of votes which abstained from voting |
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3,054,369 |
Item 6. Spill Resolution (contingent item)
Item 6 was a contingent resolution only to be considered if at least 25% of the votes cast on Item 2 - To adopt the Remuneration
Report, were against adopting the Report. The resolution to adopt the Remuneration Report was passed therefore this Spill Resolution has no effect however we have elected to report the proxy voting outcome.
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Votes where the proxy directed to vote for the motion |
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251,609,349 |
Votes where the proxy was directed to vote against the motion |
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1,792,497,257 |
Votes where the proxy may exercise a discretion how to vote |
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49,928,408 |
In addition, the number of votes where the proxy was directed to abstain from voting on the motion was |
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6,083,218 |
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/s/ Stephen Foster |
Stephen Foster |
Company Secretary |
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9 May 2014 |
ALUMINA LIMITED
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ASX Announcement |
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9 May 2014 |
AGM Voting Result correction
A typographical error occurred in the announcement regarding the 2014 AGM voting result.
The wording incorrectly indicated that Item 2 was not carried. Item 2 was carried and an amended result announcement is attached.
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/s/ Stephen Foster |
Stephen Foster |
Company Secretary |
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9 May 2014 |
ALUMINA LIMITED
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ASX Announcement |
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16 June 2014 |
AWAC to Pursue Sale of its Stake in Jamalco
Alumina Limited notes and attaches, Alcoa World Alumina and Chemicals LLCs statement regarding the signing of a letter of intent to pursue a sale of its
interest in Jamalco.
Some statements in this public announcement are forward-looking statements within the meaning of the US Private Securities
Litigation Reform Act of 1995. Forward-looking statements also include those containing such words as anticipate, estimates, should, will, expects, plans or similar expressions.
Forward-looking statements involve risks and uncertainties that may cause actual outcomes to be different from the forward-looking statements. Important factors that
could cause actual results to differ from the forward-looking statements include: (a) material adverse changes in global economic, alumina or aluminium industry conditions and the markets served by AWAC;
(b) changes in production and development costs and production levels or to sales agreements; (c) changes in laws or regulations or policies; (d) changes in alumina and aluminium prices and currency exchange rates; and (e) the
other risk factors summarised in Aluminas Form 20-F for the year ended 31 December 2013.
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For investor enquiries: |
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For media enquiries: |
Ben Pitt Investor Relations
Manager Phone: +61 3 8699 2609
Ben.pitt@aluminalimited.com |
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Nerida Mossop Hinton and
Associates Phone: +61 3 9600 1979 Mobile: +61
437 361 433 |
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/s/ Stephen Foster |
Stephen Foster |
Company Secretary |
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16 June 2014 |
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Alumina Limited |
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ABN 85 004 820 419 |
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GPO Box 5411 |
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Melbourne Vic 3001 |
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Australia |
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Level 12 IBM Centre |
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60 City Road |
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Southbank Vic 3006 |
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Australia |
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Tel +61 (0)3 8699 2600 |
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Fax +61 (0)3 8699 2699 |
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Email info@aluminalimited.com |
ALUMINA LIMITED
Alcoa World Alumina & Chemicals Signs
Letter of Intent to Pursue Sale of its Stake in Jamalco
JAMAICA June 13, 2014 Alcoa confirms that it has signed a
non-binding Letter of Intent with Noble Resources UK Limited to pursue a sale of its ownership stake in Alcoa Minerals of Jamaica, L.L.C (AMJ), which operates the Jamalco bauxite mining and alumina refining joint venture. Jamalco is owned jointly by
AMJ (55%) and Clarendon Alumina Production Ltd. (45%). The decision is in line with Alcoas global strategy to reshape its upstream portfolio and lower the cost base of its commodity business.
In the proposed transaction, Alcoa would retain a minority interest in AMJ and serve as Jamalcos managing operator for at least two years. Employees
would remain employed by Jamalco. Work will continue on pursuing an energy solution for Jamalco. The transaction is subject to the required approvals of the Government of Jamaica, the finalization of definitive purchase documents, necessary
approvals, consents and due diligence.
Alcoa Minerals of Jamaica, L.L.C. is part of the Alcoa World Alumina & Chemicals group of companies and
is owned 60% by Alcoa and 40% by Alumina Ltd. Clarendon Alumina Production Ltd. is a company wholly owned by the Government of Jamaica.
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