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Researched by Industrial Info Resources (Sugar Land, Texas)--Aluminum producer Alcoa Incorporated's (NYSE:AA) (Pittsburgh, Pennsylvania) net earnings were in the black for full-year 2014, following higher metal prices and strong results in the midstream and downstream businesses, as well as stronger sales to the energy industry. Executives said that operating results were the best since 2008. Net income was reported to be $268 million, compared with net losses of $2.29 billion for full-year 2013.
Industrial Info is tracking $5.81 billion in active projects involving Alcoa, including the $190 million expansion of the Davenport Aluminum Works facility in Riverdale, Iowa. The project involves installing a new thick-plate stretcher to enhance the performance of thick aluminum and aluminum-lithium plate, two key products for the company. The expansion is expected to kick off around July and be completed in December 2016.
Total sales stood at $23.91 billion, a 3.79% increase from 2013. The growth was attributed to the midstream businesses' success in the aerospace and automotive markets, including a record volume of automotive sheet shipments in the Global Rolled Products segment. The company's recent, $2.85 billion acquisition of Firth Rixson (Sheffield, England), a leading designer and manufacturer of aerospace jet engine parts, is expected to boost revenues by $1.6 billion by 2015, and by $2 billion by 2019.
Capital expenditures were reported to be $1.22 billion, compared with $1.19 billion in 2013. Growth capital expenditures totaled $484 million, and sustaining capital expenditures were $735 million.
"[When you] look at the full-year productivity that we've been able to generate at $1.2 billion, it's really coming from all across the company and all segments, all functions," said Klaus Kleinfeld, chairman and chief executive officer of Alcoa, in a conference call.
Growth capital expenditures are expected to reach $750 million, and sustaining capital expenditures $725 million, in 2015.
Late in the quarter, Alcoa announced plans to purchase TITAL, a leader in titanium and aluminum structural castings for aircraft engines and airframes. TITAL generated revenues of approximately $100 million in 2013, more than half of which came from titanium products; its titanium revenues are expected to increase 70% by 2019. Alcoa expects to close the transaction in the first quarter 2015.
"We finalized the sale of our three European rolling mills," Kleinfeld said in the conference call. "We safely executed the Australian rolling mills closures, and we sold the Jamalco interest in Jamaica. The Saudi Arabia refinery is now fully operational; it is making its first alumina from Saudi Arabian bauxite. That is a historic first in the Kingdom and a really fantastic achievement by the whole team there. And we sold the stake in our Mt. Holly smelter to Century."
Among the key global end markets in 2015, executives expect to see strong growth in the aerospace market, with sales increasing 9% to 10% over 2014. Automotive production growth is expected to be steadier at 2% to 4%. Executives also expect to see 5% to 7% global sales growth in building and construction; 2% to 3% growth in packaging sales; and 1% to 3% growth in industrial gas turbines.
As with 2014, aluminum demand growth is expected to be about 7% in 2015.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Industrial Info is tracking $5.81 billion in active projects involving Alcoa, including the $190 million expansion of the Davenport Aluminum Works facility in Riverdale, Iowa. The project involves installing a new thick-plate stretcher to enhance the performance of thick aluminum and aluminum-lithium plate, two key products for the company. The expansion is expected to kick off around July and be completed in December 2016.
Total sales stood at $23.91 billion, a 3.79% increase from 2013. The growth was attributed to the midstream businesses' success in the aerospace and automotive markets, including a record volume of automotive sheet shipments in the Global Rolled Products segment. The company's recent, $2.85 billion acquisition of Firth Rixson (Sheffield, England), a leading designer and manufacturer of aerospace jet engine parts, is expected to boost revenues by $1.6 billion by 2015, and by $2 billion by 2019.
Capital expenditures were reported to be $1.22 billion, compared with $1.19 billion in 2013. Growth capital expenditures totaled $484 million, and sustaining capital expenditures were $735 million.
"[When you] look at the full-year productivity that we've been able to generate at $1.2 billion, it's really coming from all across the company and all segments, all functions," said Klaus Kleinfeld, chairman and chief executive officer of Alcoa, in a conference call.
Growth capital expenditures are expected to reach $750 million, and sustaining capital expenditures $725 million, in 2015.
Late in the quarter, Alcoa announced plans to purchase TITAL, a leader in titanium and aluminum structural castings for aircraft engines and airframes. TITAL generated revenues of approximately $100 million in 2013, more than half of which came from titanium products; its titanium revenues are expected to increase 70% by 2019. Alcoa expects to close the transaction in the first quarter 2015.
"We finalized the sale of our three European rolling mills," Kleinfeld said in the conference call. "We safely executed the Australian rolling mills closures, and we sold the Jamalco interest in Jamaica. The Saudi Arabia refinery is now fully operational; it is making its first alumina from Saudi Arabian bauxite. That is a historic first in the Kingdom and a really fantastic achievement by the whole team there. And we sold the stake in our Mt. Holly smelter to Century."
Among the key global end markets in 2015, executives expect to see strong growth in the aerospace market, with sales increasing 9% to 10% over 2014. Automotive production growth is expected to be steadier at 2% to 4%. Executives also expect to see 5% to 7% global sales growth in building and construction; 2% to 3% growth in packaging sales; and 1% to 3% growth in industrial gas turbines.
As with 2014, aluminum demand growth is expected to be about 7% in 2015.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
