AWC - Alumina Limited

Smurf1976 said:

On one hand I really don't like to see the demise of another industry, workers out of a job and so on.

On the other hand I bought AWC shares on the 12th of December 2023 and so far it's been an excellent trade, up 50.6% in just under a month.

That's a short term trade however not a long term investment. The buy decision being based purely on price action during the period 27-11 to 7-12 inclusive. Exit will be on the stop, the level of which is reviewed weekly based strictly on a formula.

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Interesting how we see things.....I'm seeing a pullback from here!

sptrawler said:

Very courageous. Lol

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that depends

will the world still need aluminum manufactured outside of the BRICS umbrella ( since there is now 5 extra nations )

i hold S32 and CSR and both have aluminum exposure but how will they combat rising costs , will the West find a substitute , or send processing to nations willing to build nuclear ( or geo-thermal ) power plants , or maybe thus climate change madness will be banished from the industrial/financial world

i mean good luck keeping up with the space race without abundant aluminum

rnr said:

Interesting how we see things.....I'm seeing a pullback from here!

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i am still dithering whether i should try for another ride on this

i can't imagine a modern world without aluminum , but then if it costs heaps to produce , who will be buying the products ( especially since rivals to say aluminum food packing are just as carbon intensive , unless we go back to glass and cardboard containers )

if so the packaging industry will face severe disruption

So far, so good with this one both as a pick for the 2024 competition and that I'm presently holding with real money as well.

From an intraday low of 68.5c in late November and a calendar year 2023 close of 90.5 it closed yesterday at 116.5c so all good so far.

Smurf1976 said:

So far, so good with this one both as a pick for the 2024 competition and that I'm presently holding with real money as well.

From an intraday low of 68.5c in late November and a calendar year 2023 close of 90.5 it closed yesterday at 116.5c so all good so far.

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Change is in the air.

• Transaction would further enhance Alcoa’s position as of one of the world’s largest bauxite and alumina producers with increased ownership of core, tier-1 assets

• Transaction would provide Alumina Limited shareholders the opportunity to participate in the upside potential of a stronger, better-capitalized company with a larger, more diversified portfolio
• Transaction would result in significant and long-term value creation for both companies’ shareholders from greater operational flexibility
• Alumina Limited’s largest holder, Allan Gray Australia, has entered into an agreement with Alcoa which gives Alcoa the right to acquire up to 19.9% of Alumina Limited’s issued share capital

Alcoa and Alumina Limited have entered into an exclusivity and transaction process deed ("Process Deed"), and the Alumina Limited Board of Directors has confirmed that, subject to entry into a scheme implementation agreement, it intends to recommend the transaction to Alumina Limited shareholders. Under the all-scrip, or all-stock, transaction, Alumina Limited shareholders would receive consideration of 0.02854 Alcoa shares for each Alumina Limited share (the "Agreed Ratio"). Based on Alcoa’s closing share price as of February 23, 2024, the Agreed Ratio implies an equity value of approximately $2.2 billion for Alumina Limited.

Do you know someone in this company @Smurf1976 ?

Sean K said:

Do you know someone in this company @Smurf1976 ?

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No nothing like that.

I know a reasonable amount about the industry itself though and have been on site at another company's smelting facilities in the past.

That I picked it for the competition was as described, just putting longer term data into a short term trading system and seeing what happens. So far though the outcome hasn't been too bad.

For the company and industry itself, the big issue is always energy. Alumina refining needs heat and lots of it whilst aluminium smelting requires huge amounts of electricity. That's to the point that if you look at where the refineries are located, they're pretty much always somewhere that has an energy cost advantage, they'll be near the mine only if energy can be supplied there cheaply enough.

2023 Full Year Result1

Alumina Limited
• Net Loss After Tax (NLAT) $(150)m, FY22 Net Profit After Tax (NPAT) $104m
• No Final Dividend
• Net debt at 31 December 2023 of $(294)m. Syndicated credit facility limit of $500m AWAC2,3
• EBITDA4 of $165m; 2022 $817m
• Alumina Production 10.3Mt; 2022 11.8Mt
• Alumina realised price $352/t, Cash Cost of Production $308/t Alumina Limited (ASX: AWC) (“Alumina”) today reported a statutory net loss after tax of US$150m for the full year ended 31 December 2023 compared to a net profit after tax of $104m in 2022.
The Company did not declare a final dividend. 2023 was a difficult year for AWAC, with the business experiencing lower production volumes and higher production costs, combined with a lower realised price for alumina.
While these results are disappointing, AWAC has recently achieved a number of important milestones.
Confirmation of the mine plan approvals in WA restores confidence in near-term operations while AWAC progresses approvals for the next mining areas at Myara North and Holyoake. AWAC has also announced two significant actions to improve financial performance. Firstly, the decision was made to curtail AWAC’s oldest WA refinery at Kwinana from the second quarter of 2024.
This will allow the business to focus on its two tier 1 refineries in Western Australia at Pinjarra and Wagerup. Secondly, the decision was made to initiate further action at the partially curtailed San Ciprian refinery in Spain.
Together with the ongoing focus on profitability improvement across all aspects of the portfolio, these initiatives provide AWAC with a strong foundation to create a significantly higher quality refinery portfolio.
The alumina price was down approximately 5% in 2023 compared with the prior year.
However, the alumina market outside China continues to be tightly balanced.
This was illustrated recently, with the alumina price increasing to $372/t in mid-January 2024 driven by bauxite supply concerns in Guinea and refinery curtailments in China.
This tight balance will be more pronounced following the curtailment of Kwinana during the second quarter of 2024.
Proposed transaction with Alcoa Corporation On 26 February 2024, Alumina announced that it has received a non-binding, indicative and conditional proposal from Alcoa Corporation (“Alcoa”) to acquire 100% of the ordinary shares on issue in Alumina via a scheme of arrangement, for a scrip consideration of 0.02854 shares of Alcoa common stock for each Alumina share.
The proposed terms represent a 31.6% ownership for Alumina shareholders in the merged entity, on the basis of the current shares on issue.
The proposed transaction unifies the ownership of AWAC and provides a number of strategic and financial benefits to Alumina shareholders.
The Proposal is subject to negotiation and execution of mutually satisfactory definitive transaction documentation, which is expected to be subject to customary conditions and regulatory approvals standard for a transaction of this kind, including Alumina and Alcoa shareholder approval.
The Proposal follows earlier indicative offers from Alcoa and a period of mutual due diligence. Alumina has granted 20 days of exclusivity to Alcoa, to finalise satisfactory definitive transaction documentation.
The Alumina Board notes there is no certainty that the Proposal will result in binding offer for Alumina. Alumina shareholders do not need to take any action in relation the Proposal.
DEFINITIONS AND NOTES 1. All financial data is presented in USD unless otherwise specified. 2. AWAC is Alcoa World Alumina & Chemicals, which is 40% owned by Alumina Limited and 60% owned by Alcoa Corp. 3. AWAC financial information has been extracted from unaudited combined financial statements prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP). 4. Earnings before interest, tax, depreciation and amortisation consistent with previous periods.

This ASX announcement was approved and authorised for release by the Board of Directors.

KATHERINE KLOEDEN COMPANY SECRETARY

i do not hold this share ( but have in the past )

The share price has kept on rising, closing at $1.42

I note however it's now at a level that has previously provided support and which could now plausibly become resistance to further rises. Time will tell, but looking at the chart that's what I see.

For the moment though, price is up 100% since November last year so can't complain about that.

The uptrend has continued through April, up 12% thus far on last month's close.

Looking at the chart, it's at an area which has been significant in the past on a number of occasions as far back as the 1986, so that may turn out to be resistance, let's see what happens. So long as it doesn't come back down I'll be happy.

The price rise continues through May, noting there's a proposed scheme for Alcoa Corporation (US) to acquire 100% of Alumina subject to the approval of shareholders and regulators.

Another of my trading competition picks which has unfortunately seen a falling price so far in June.

Only real news from the company is regarding the proposed takeover with a shareholder meeting and vote to occur in July.

Unfortunately the downtrend has continued in July, now clearly trending down with lower highs and lower lows.

My picking this for the annual competition may have been a case of peaking too soon perhaps:

Smurf1976 said:

Unfortunately the downtrend has continued in July, now clearly trending down with lower highs and lower lows.

My picking this for the annual competition may have been a case of peaking too soon perhaps:

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@Smurf1976 ....
Did you realise that AWC was delisted a week ago - it is now AAI on our ASX....

On August 2nd, 2024, Alumina Limited (AWC) was removed from the ASX's Official List in accordance with Listing Rule 17.11, following implementation of the scheme of arrangement between AWC and its shareholders in connection with the acquisition of all the issued capital in AWC by Alcoa Corporation (AAI).