Alcoa (AA) 17 Jul 242024 Q2 Earnings call transcript

Good afternoon, and welcome to the Alcoa Corporation Second Quarter 2024 Earnings Presentation and Conference Call. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to James Dwyer, Vice President, Investor Relations and Pension Investments. Please go ahead, sir.

Thank you, and good day, everyone. William Molly Corporation and Beerman, Officer. by Executive and Chief today and Officer; Executive joined Oplinger, President Alcoa Chief Financial I'm Vice President

will Bill comments We questions Molly. by your take and after

SEC discussion a expectations included materially Factors from to and subject filings. that will As cause are in today's today's contain statements presentation company's future that and relating assumptions various are differ the these in forward-looking and to may statements events to caveats. our results reminder, actual

have we financial in addition, non-GAAP In included measures this some presentation.

For most historical appendix measures found to non-GAAP to financial measures, the directly can reconciliations the in financial comparable GAAP today's presentation. be

to of reasons means We have slide. adjusted in this reconciliations non-GAAP today financial reference certain noted quantitative EBITDA on measures for not EBITDA. Any presented discussion forward-looking our

announced, earnings are Bill. and slide previously our With as release the that, presentation website. press here's on available Finally,

to and call. welcome, Jim, earnings XXXX Thanks, conference everyone, second our quarter

a good pleased are a in overwhelmingly to yesterday hours done Alumina Limited closing date work in issuing transaction. and X. the The and would to meeting as stockholder occurs we Before an Alcoa have approve shareholder all well, meeting of completion Alcoa held nearing there say expected transaction we to acquisition. the shares the for Alumina Alcoa favorable expect have which to result few lead of August the get We we voted Limited I'm that stockholders quarter, the we

Limited before, Alcoa. we its look both realizing me shareholders that forward As for we Alumina sets the and say you've and deal welcoming into benefits transaction shareholders heard believe this is of right to

to the quarter. move Now let's

bedrock are behaviors our and both Safety leading the excellence. lagging reflected people the continue First, upon of to I'm programs in which our we pleased operational drive being for build and linchpin the is value indicators. right care that and safety

on and improvement Second, results our delivering are track. profitability remain programs

of timely a and Third, at records Kwinana stability at the operational system and by evidenced is improving safe Canadian and the smelter. curtailment stability Mosjøen, steadily Alumar smelter production

resolution we find solutions at continue sale addition, possible to as the and Ciprián best process. the energy San In also progress potential we to strive work toward competitive

Finally, also aluminum our on cash fronts improve company, many profitability actively have flows. and markets favorable the have we alumina helped while and to been working improve

will over Molly, details. With that, I to has the it turn who

Thank you, Bill.

on on was $X.X third-party Revenue X% revenue up In price increased third-party segment, average and offset realized prices. and shipments. lower to segment, higher sequentially partially Alumina higher the to In average alumina billion the the aluminum higher third-party Aluminum increased increased XX% due shipments. price, by revenue realized third-party

net quarter improving was earnings $XX Second income per quarter share. of $X.XX $XXX with to share attributable loss to million prior the by $X.XX million, Alcoa the versus in per

On per or attributable was an net $XX million share. to adjusted $X.XX basis, Alcoa the earnings

million $XXX to increased EBITDA Adjusted million. $XXX

of look the EBITDA. drivers Let's at key

EBITDA adjusted increased than to higher our due due alumina partially quarter volume average alumina prices, and primarily lower segment for related million, higher higher second restarted volume production increase Alumina was to and material offset and costs. and aluminum, alumina prices metal Alumar to more impacts Raw offset from smelters. offset improvement primarily Warrick energy increased costs. The The cost higher $XXX offset other as higher prices more realized primarily segment The and partially Aluminum than million, shipments $XX costs. by third-party production by

requires to elimination. more is unfavorable were Intersegment increased which labor-related various Outside quarter, profit higher in average alumina eliminations other price expenses. corporate primarily increase the as the the due segments, expected, costs

uses were cash. second movements working of Let's look at within cash and on next changes our capital slide. the quarter Year-to-date June, expenditures the through largest capital

additional provide investment capital a to portion vessels Brazil. X is of leased. our vessels will XXXX of first to Two be The includes purchase $XX commitment transportation which half of an expenditures million, in bauxite

$XX We significant of savings to and Alumar $XX in have cost refinery. our alumina. to mine freight bauxite Juruti be We estimate an ton opportunity per for reductions between

The later this contract the considerable region We vessel with a week operator operations first arrived technical year. in received the to X our be Brazil expertise in hired additional with behalf. to this an manage on ships

the use of XXXX, X working Through first cash. capital months a is of

balance While decrease we prices flat second than close higher first working to quarters. in We still between to working normally capital and expect reduce year. inventories, throughout more the of continue the raised to the remainder start capital leaving aluminum receivable balance the the alumina quarter the quarter, accounts the after in capital reduce working to

metrics. other on Moving key financial to

in capital improving, year-to-date negative to changes decrease was a XX days decrease payable by on days, offset due both to in favorable a and accounts in While sequentially, the inventory on in decreased return sales the days the higher working equity X.X%. days second partially X primarily quarter Days balances.

Our million second dividend stockholder quarter added capital to returns. $XX

was by $XXX for sequentially quarter positive improving Free maintained at million. net was distributions balance $X.X less The $XXX interest at the million, cash flow cash billion. noncontrolling

the million with their the connection debt approximately will Alcoa acquisition, In revolver. Alumina on of drawn assume Limited $XXX

reduce We continue operations. focus we and at maintaining to levels options are delevering on looking a strong sheet improving and debt expect to balance as

to acquisition changing from from due is On expenses. at labor-related $XXX million $XXX previously approximately Other to outlook assumed the million changing to Limited approximately additional costs closing. for million third approximately the corporate $XXX quarter. the debt the Alumina mentioned $XXX expense related to approximately Interest million is

capabilities creek considering million is with are rates and to projects $XXX to enhancements approximately capital we approximately changing from as of small value-add return, projects. primarily Return-seeking million attractive several return-seeking $XX our product

we for to segment, prices Aluminum favorable material related grade. bauxite changes segment, we expect unfavorable $XX million approximately third raw Australia $XX the million. approximately In Alumina impacts in of the Regarding of expect sequential the quarter,

the will cost overall $XX in are While million. be EBITDA, to higher expected unfavorable alumina aluminum Aluminum price increase Alcoa the of segment adjusted by

we EBITDA, by to increase quarter third Below expect million. expense interest $X

expense tax quarter Based to operational pricing, we approximate million million. week's XXXX $XX $XX on last to third expect

acquisition be income interest to Net approximate reported through is expected and million. $XX attributable to noncontrolling closing will

to the included our the In with third appendix, expected X, acquisition certain changes the XX the relation have financials of our In Alumina statements. see quarter. be in changes August notations to made financial we will on closing Limited you on to June

As income of and interest, noncontrolling the income equity additional attributable to no statement the into sheet portion expected, collapse assumed the the net reflect noncontrolling reflect debt will balance and longer will the interest capital.

see end. the On interest to statement, Please the details. cash appendix additional flow for noncontrolling distributions will the

it back Bill. turn I'll Now to

Thanks, Molly.

the with start markets. Let's

In up quarter supply-side driven alumina, disruptions alumina and The several in Supply the the is quarter. there supply the low-carbon surged in strong tight, by continued from second smelters. of pipeline. and first projects prices currently limited is a demand versus are price

of and domestic has issues rest and world. Supply amid occurred year. curtailed to this into Chinese In the bauxite in the inspections. both imports safety response, due environmental seaborne volume China continued capacity bauxite of and increased the of China refineries price shortages

the of these in Outside in supply capacity some issues factors spot province making ramping supply. force Australia in Demand the exports, increase to majeure still reduced in reduced tight. market as capacity that China, the curtailed Australia Queensland contributed Kwinana seasonally due as in All curtailment restarted Eastern Europe alumina Western to up. is well to and Indian China Yunnan

to to demand for we in the primary alumina supply growth. with line the grow aluminum In longer continue expect term,

refineries to supply China Chinese However, expected is refinery carbon from footprint. domestic increasingly more resources Refining and become bauxite in there are likely bauxite over seaborne supply on challenges to time. are as expensive both their deplete. rely

time new and domestic policy to ensure to In refineries, investment the this add addition, meet place standards for a in requiring was standards. additional new put year energy efficiency they

in projects challenge the potential pipeline. Another is supply the footprint refinery the carbon of

For only refining, mining produced X primary be and and X X.X truly equivalents of with emissions COX low our and less a than aluminum, alumina and EcoSource, X aluminum offer smelting tons ton refining. aluminum carbon has under from carbon be We including which to dioxide is world's mining, and carbon alumina, emissions footprint carbon, of low-carbon it brand, X per low mine Scope Scope X ton tons needs metal. primary casting; of from per of which from produced, EcoLum low-carbon including to to the

However, come likely before are projects few refinery global none pipeline alumina a and projects, when online alumina the that XXXX. to in expect considering there low-carbon we

aluminum the first market versus moved dynamics. higher quarter, current the market. prices aluminum, to move Let's have reflecting In

projects million ton XX side, supply limited near the are annualized to its the On smelting term, new in capacity and there to cap. China hold continues

advanced Chinese different the outside quotas, Indonesia smelters result have relocated capacity China: of provinces Chinese-affiliated utilize Some to have within to their in direct Angola. China and and projects cap, smelter some a fully of as

increase supply global at has limited, demand year-on-year. low This kept While remained continues levels. inventories growth global historically to has

Overall, in and transportation sector. cutting implemented, Europe in and there which year, the though provide this recent trade particularly in several defense interest Europe. most for on packaging too, in year remained have in those a even demand the Electrical the and deeper the rate automotive regions. to months, this and recovery segment has North Europe rate U.S. Building strong of could likely solid, support later construction anticipated sector, in in challenged segment. start are been however, the in cuts uplift Digging remains this demand, slowed is America growth actions

disruptions regional U.S. April driven supply against America, North metal Red side, and in in and quarter a the Sea. Europe sanctions premiums the On the combination U.K. in second continued likely pricing across of up the sequentially chain Asia, by Russian were and

we are excited to of aluminum that China. now Asia, premium America available XX% demand outside there representing front, On low-carbon of and in note the aluminum pricing aluminum North Europe, green are indices all

these As we for a products is the leading aluminum, believe low-carbon demand support view supplier of our premiums rising. low-carbon that

for exposure low-carbon a with towards by carbon convinced steadily aluminum In We for as primary healthy, of picture growth focus the meeting to Demand duties. low-carbon emissions-based a on their see import aluminum long-term aluminum. longer users transition the future. society's term, decarbonization and driven their minimizing grow we future targets remain should bright demand

XX% to in less and coming While the next demand of with to projects aluminum both power. XX there's low-carbon are list online X short a expected the of years, grow, projects years the smelting X next than renewable in likely using overall

aluminum both strength, positive. the showing are outlook markets So in and long-term summary, remains our alumina and

Alcoa-specific move future including our an current Let's exciting to announcement to for and performance, topics, related ELYSIS. operating operations

Whenever continuous our safety, discuss stability we I improvement. things: locations, and visit three operating

value. core to process Safety an continuous indicator and improvement. on stability Alcoa a perfect is a place is focus of It

leading month. safety X,XXX substantially we rate, is programs, our are improvement recordable based such in Evidence which verifications and the that DART roughly total as both improving our and we to perform We of critical indicators control on judge such field evolve also performance safety clear indicators, year-on-year. continue our lagging the as every

are that of coincidence no production setting records. plants It's then our many

smelter system record. Mosjøen and quarterly Norway smelting set year set half the a in production both Canadian Our production a half record year and

in starting and quarters fact, fourth XXXX. In straight of the production aluminum for Alcoa's both has increased sign continuous stability a quarter total improvement. of X That's

a we to Turning on project, the program. longer-term further progress ELYSIS recently technology announced

ELYSIS cells its Pittsburgh. benefit Our ELYSIS production its near produce to the Alcoa have using up that get build at for We're will technology demonstration in the first project of excited anodes demonstration rights in partner occurs will XXXX. metal, center forward also to technology. for by the offtake technology will cells Alcoa Alcoa technology to underway will and project. the XX supply for XX% the successful from and start-up large-scale development this look Quebec and

an profitability processes. and Ciprián focus: on ongoing our San update areas two Finally, provide sales let our of key and programs improvement improvement me

by EBITDA million our provided target months. just by has more than list actions improve to year-on-year adjusted the end remains met months of captured next baseline. improvement be over XX the ago, we $XXX XXXX To and under XXXX Six million date, of a approximately compared already to the $XXX targeted a half to

and piece as our large half, savings good raw materials program, are raw A team's caustic, the favorable savings material coke we pitch. of target. of includes procurement Thanks our ahead work materials markets, such cost and was almost which to

of year-end. While the X path already the expect by harder to materials have it we is raw and here, achieved from exceed quarters target

$XX target. about potline has Alumar operational savings, other elements its $XX internal its of successful of million captured with its of million million program. are X/X restart, improvement restart being increased of captured total the program its thanks of The pleased its $XX has and productivity is has its to dependent Warrick, million on target, in Progress captured half we upon The IRA X/X target, funding. stability. also $XX year-on-year smelter with another the increased made

benefit in the of of financial although Finally, we full are to starting see are full the curtailment the benefits XXXX. to likely be refinery, Kwinana realized

So in pleased profitability are our on to programs. total, we with improvement our progress date

Ciprián. we was lever for solution near-term a outlined final improvement finding The San

improving improvement on competitive focused has and smelter rely the on Both the approach location's the for energy refinery. two-pronged competitiveness process initiative a competitiveness Our pursuing sale. both finding and sale potential and on

While than be they're still lower electricity and in range highs, a extreme that could gas not the prices are recent competitive. back considered

Even government and delays costs, entities they power helpful On of challenges, material But noted permitting denials to compensation COX continue fronts. precluded renewable could on successful depend Spanish it we sale year. The support. union as with generation. availability the multiple provide low-cost and the bring will these process work be and this government that could earlier, on electricity conclusion aim and sale to eliminate to have a

we to acquisition. Limited finalizing it close Summing are Alumina up, the

exposure provide and position aluminum Limited firmly result a this operational to We leading flexibility are shareholders excited and strategic as aluminum will It Alumina believe global will Limited the and Alcoa and financial Alumina ASX-listed upstream, greater to shareholders enhance welcome pure-play, global that Alcoa's in transaction company. optionality.

operational advance progress various as to our diligently and we improvement safety continuing are initiatives. metrics Our

are and at time to Recent accomplished a be the a aluminum and even lot have We long-term for markets Alcoa. great and been the and aluminum industry is targeting we mid- It's have bright. favorable, we outlook more. alumina believe

start that, question-and-answer let's the With session.

question Alba De come first Morgan Stanley. with Carlos today from Our Instructions] [Operator will

Bill Congratulations and progress you on made, that the have guys Molly.

the the synergies So funding to plant. participating one my question investment? second industrial to everything can that when to those was assuming is as transaction the not material, expected early the in closed? And first closes the again, the goes the the once, of in of of the plant, to had XX% but in quickly laid the that the thought expect Alcoa pace purchase you not decision out, realize of you process related of what question on deal are understand synergies, participate how synergies ELYSIS you have is and is -- do see August, pace I for the you that right

first take take it's the question, and can Carlos, then Bill I'll Molly. the second.

Alumina synergies immediately. have start we and with the will On we would that of million, savings $XX outlined Limited, overhead that

that the have the within thing the need we jurisdictions that so able tax other we framework closer get advantage. is to debt operations The by can where expect to that improvements outlined them, place a capital allocation to we

will of we'll that move debt Now not over time, period take a time, and immediately.

size is they're smelting we we the pots time, good technical have the this cathodes implementing XXX at of ELYSIS and question, construct it's of pot. the being of solution the center. that so On same the kA a construct, Carlos, at anodes reason a the first the believe the the Arvida, be building testing second ground implementation we will and the on for that XX that ELYSIS really at smart At is

lowest we is we between good option the the the solution X partners. I running. to like the in XX% carbon metal taking of and have So once balance really because and also of offtake, so it's this the up world have a the access will

the deal this structured we way implementation. the first and success with looking this pleased very of So forward to

BMO Jancic Markets. from And next Katja question will Capital with our come

in term. the more bauxite near being an of that impact. that Australia. unfavorable grade be on I from have segment, shut that? less could that, an a mentioned, Maybe you you you with down assume Alumina Can color would Molly, little in Kwinana provide impact

been we quality, usage, the costs. costs Katja, unfavorable we to higher favorably higher some maintenance. thanks energy, our indicating bauxite operating but impacts, caustic, with actually estimates to related the to we We the now for comparison are are What question. million your maintenance additional bauxite higher quality original $XX face additional bauxite on are in starting seeing had

quality. lower sorting going to needed maintenance run the And be the to bauxite level at so are that's we

Anyway, that incremental think how this moving be will there Is should continue? something pressures? Could forward? we

the We you will teams additional give sorting guidance. Honestly, are that now.

determine the center spend teams of to the level and they're between maintenance our excellence, So hard proper working what is.

our next Dudas Vertical Michael come question will from And with Research.

dynamics Obviously, could all with and So just witnessed you've share to alumina there a business, pressure on environments that's as And dynamics market? something you does folks Alumina Is with maybe has cost a how bring issues? other this for how little those capacity thoughts on in this current that especially occurring, environment the Is spiking the level can compare price your you the are your planning from Australia? sustainability? more bit that impact? you

year, fairly industry situation. ton full today for tune the in million deficit. a industry, The globally, the that we're is quarter in a for to anticipating We deficit. in X unique alumina the exited metric second alumina a And will be of deficit around, the about

obviously, seeing our deficit The Australia issues smelters in we that very curtail that near ramp-ups a China. it's things specifically way with tight, is gets supply if is the in of the from get really in world. around alumina. it solved, There's one term, competitors, that two drove in some deficit and we're either or Northern only So situation that and

in look we comes that as are So only forward, the market if issues those solved. supply balance back

and when our the As that prices, get pushing any can running gain far these to trying you benefit at whether these this the and question, understand, of on make to operations, second we we bring higher on Alumina door our the we're ton has prices. every shareholders impact sure the as out of

changes there. a since partner, We acquisition Alumina was significant with associated operational will XX% have not Limited any changes the but minority operational no

hope your that I answers Michael. question,

a and where suggestion could does, the pricing prices Bill. bit, any of with positive of issues could other there impact work you is given smelters And some is the on market talked some since way, that are, a can other there It you've so alleviate think? any prices energy alumina just Especially quick spiking about, the follow-up, curtail? that

ForEx, how pressure of on it will on depend lot marginal But it puts at $XXX metal a and ton, on clearly, these will persist. prices smelters. price what is a but It depend long

I and at So Southeast and the as could that the Asia potentially, prices exposed around it that, be would these the higher East. pressures be look in smelters world, Middle with associated to the

And Independent will come from our Tumazos Very John question Tumazos Research. next John with

X.X% the can't alumina? or gas the work-in-process and Kwinana used first there the aluminum getting up? have inventories up world in With because are Or inventories somehow months, don't curtailments outage, that metal output they operate Queensland alumina-in-transit X are smelters

the So John, in term, right, you're think question. on that I near

roughly inventories around in seeing world. will and should with for are this quarter Southeast of but and deficit to really of on also full and capacity. Middle very to smelters, second tons put get it listed XXX,XXX year similarly Michael, we point, to depend refining whether quarter, is saw on that India, a exposure a the question may basis, a exposed tight have really levels inability how We I and didn't tons, ramp-up in the the it the that alumina. persists answer that X this deficit But the there's East India, the million a metric it's answered alumina. in long around second with inventory which, of areas The for stress And I see to what quarter, at we Asia be associated

improve A the but question, of Spain both your books, your second charge your smelter if every EBITDA settlements, of off would Ciprián how much San onetime the and off alumina were year books? with alumina possible not

was say XXXX. million of the and XXXX, approximately Spanish will $XXX which correct that losses then that think was guided me, in will think saw losses we've I Molly them associated in EBITDA but it on closest the I with the assets I we probably that

That's correct.

Thanks.

Congratulations on again. profitable being

Thanks, John.

Tanners come Wolfe our question will from next Research. Timna And with

insights be looking any the if starting repeal, of you been updates insights and regarding latest ask and the hot to there. the would dial-back into amount curious wanted insights to any broader have you for to or on to currently on topic get I a into XXX be lots have possible to any remaining you've that any

clearly tranche, be how assets. we're very is on would second administration. of So with XXX to competitiveness before, point. did what XXX first no important the they the Massena U.S. the and reiterate, but insights important and it understand I on including appreciative the We've I reiterated the Warrick. XXX at They critically for this would of tranche had around dialogue

your Timna? was What question, second

and the broader you There's also don't vein know some repeal of in were like discussion a if that's of IRA, of so particular XXX just broader IRA. but what addressing, same in I

the Yes, Trump administration. there's as I've Clearly, but with repeal and administration IRA, November IRA, in who they'll been have repeal we heard far that what then the some take. current first to they win in of election as not a discussion actions potential see anything may this will

on budgeting potential how seat, any about fair. how when Sure. then our year decision in by you Spanish the about costs? do outcomes? be if could, a Totally end of would modeling of situation, a And exit think for I the if Is Or we you there there were will range made? think that the or

Unfortunately, I answer, give Timna. great you a can't

We X are down work streams. working

make comes the as competitive The energy energy first smelter refinery cost is plan we to a to well know, and solutions. as a try you as for down competitiveness largely can. And and to

that path. down we're going So

The down X little on second To we're sale had an of a we showed around that process. the interest. sale give process, is path that the companies color expression going you a of round in those with bidders. going down a through narrowed final a of a and We've round are to of now subset the those companies, process second subset got that

we the process. So solution will out whether a come can we successful on with sale see

on of hard both year. beginning the cash we and I've the made dependent clear towards some of the into work will those have decisions. year make that we're run streams like, market were fail, environment since the what out Obviously, cash, the is the to entity. of believe, looks willing to not If to pretty end put it we'll the

to made have will decisions then. hard be real some So

next And Citi. with Hacking question Alex come from will our

questions. two guess I

be on talked deleveraging. maybe question Could your the for what's In you there? out you lay table Molly. prepared for First remarks, options would about

Is not one be one together? the where And there refinery the and Is a where there other? a Just other? close on Ciprián, is fate there then helpful. would up anything the secondly, San just of and tied the sell the you you world world not following and smelter

So stated Alex, net target. we question our the an on have debt first longer externally delevering, no on

the However, and is right $X.X around levels now, to XXXX, and XXXX we able than that were that we're billion. at achieve higher in $X.X billion, right

will focus back to some So to done the expect expect balance getting really best It delever. and the we We've future on us that options. we position take puts in to growth in past, do this strong acting the sheet, time. for on but us

As out the X connected It far as Ciprián place to goes, and not San in there the part any to is options, put sell incremental would difficult would Alex. is I to the rule because be X of the plant capital need operate plant independently. between

So about this I to, as that curtailment, point. but question your rule any separately. to hate where at speculate makes could I wouldn't as far to get difficult on second I sell out think we But potential options it

Okay.

Just Molly, I that Is could. a follow-up for if okay?

Yes.

It's all right.

your is I the remarks, potentially right? delevering, at sales, mean, asset flow what guess table, else prepared in cash terms I you is other just option on you're But things? #X, in looking options. of generation free assume I said

So just what are. options the I was curious

Yes.

things We in we're $XXX Again, the number assuming we're at. looking have of million Australia. debt a

have we look placing So at want we options there. debt to

over end of elsewhere are X. quarter do, the or the based options options also we through the the next to debt. evaluate flows and cash in get Alex, flow our at our is What looking look on a want the strength the year all delever at of We to

capital half delever, of referred looking delevering. to necessarily the She's at of really that, And debt. the pay It's what cash when do options options, if the second have add the that options are -- to what and we just debt do vast how working she It's asset we take today's where sales. the market it's not could prices wasn't you the options. to delever, source in necessarily not down, typically year, strategically that we fact of she our are looking signaling down really at I where for there for to options of to

clarification. helpful That's you. got I

will from JPMorgan. question And our next Bill Peterson with come

parties Bill for give at on a far? and level, context, you types at San very Peterson. Molly, this Bennett Ciprián, of Bill On indicated so have to is interest the high able are any to least that

gamut It of strategics nontraditional. spans the financial and and

expressions the opportunity this this really look sure to that of from a very interest wide ensure We wanted the of every when of variety parties. process. site. a to types different viability we We really So of net we cast at were started make

selling we when sent looked I So we at information think memorandums asset, to... the out

XX.

I over or XX. was across And parties. three XX, a going of expression those say half areas. so were XX the interest that an to produced dozens thanks,

your alumina. Great. potentially marginal one support wanted on thoughts impacted And over refineries could I one points going bauxite then more time whether quick import this having on to forward? get be cost Chinese from and your to given about

of China, $XXX approximates marginal a in China that's outside So it's probably obviously view cost, very my to close fluid situation. thinking that is a or And and ton. our whether latest

where the will currencies, is what Now is the assumption caustic that it but that. and it's price on probably close depend to and

come Pipes from question Lucas with last will our And today Riley. B.

to is a the think first cost on about in about it's savings. $XX that on way the question My side, first the right Brazil, annual vessel purchase it, million cost so

still has been are and to wondered what the but components then the think of going are improvement just if percentage have And speak looking that XX, back that $XXX million $XXX could profitability we to realize. secondly, different you you major the buckets achieved, Bill, on what achieved, kind in went the that million, Slide program, maybe been I the of I mentioned your remarks, kind to you prepared through

So first, the question on -- sorry, I want to say Project Condor.

the in Internally, vessels just Condor, we Brazil. it Project Yes. on call

Yes.

savings in a year ship million in it's you're for purchases the on over So Brazil, $XX right, that just effort.

opportunity go an the not I the question, the fundamentally to you that want our due people of was too global business. And was just part situation shipping to This going understand, make to where before sure structure into Brazil. high the cost on we're in next market down

don't to want we made why that's going sell-side there. we strategic to able are And investment the weren't that in shipping this market business. through our vessels. analysts tried While negotiations, that I into we've these we more broadly address get or thinking investors X

are not. We

like As on the internally, almost is I've described right. to belt, just but this water. All conveyor it having happens a be

Molly. So go ahead,

the couple a actions of aren't have improvement on materials, that on take. So we programs, additional the more points, necessarily there to raw

We are have we're prices sight going we months and Recall contracts inventory, in we're of The that caustic on now. are pitch. and now X to in purchase now, months that with improvement. those deliver on the the good seeing in year-over-year coke negotiating the the line so that lags X and to place the realize

as As have have the that of of tracking budget managers, all identified lost productivity budgets. Everyone across the their executed and program, Internally, we're are list company, X% a budgets. about we of far revised now. being competitiveness They initiatives. against the hundreds already

So to those. they are adhering

how And $XXX so program there. the we're that's million monitoring

half already the tons they XX% a also improved we then improvement have their that's gotten Alumar with above of to coming to Warrick, and As hit increasing Warrick, far their still remember, has $XX their as production, They that their IRA similar And X/X at with about of cost story their we're absorption awaiting had million higher already, their series they are target, so them about just do funding of operating after on on the smelter, through. initiatives productivity. there. On traditional restart, cost run word and absorption Warrick, now. rate implement of with

by end the track for of 'XX. believe full So the we they're year on

are then And down Kwinana, now. completely obviously they

higher holding We as well are ramp-down higher costs. costs as initial some seeing

cost reduction, them, it they get to will won't So but XXXX. the be until for full

of hit savings 'XX, You'll won't see some run there until full coming 'XX. in the that half rate minimal second we but

additional question a considerations. the business clarification was on second My

impact sensitivity? above Is the of how of to unfavorable in and higher million. $XX the alumina the Aluminum that citing segment the You're should about we cost $XX over think tune usual million? Or that

that So give not is separately. million your you to sensitivity. we that $XX That's within why

how show price you So cost. segment overall of we the out is additional will benefit Aluminum to for call as then us dramatically. much But an in up going obviously, higher alumina that the

sensitivity. would nothing it's is operationally the drive just there higher But that costs, really price those

price. just price. the the Just Correct,

for because that struggle you some provide flow-through, with to modeling. people Just we the and only

In is clearly quarterly effect, And alumina so the it the allows the understand is the that number in in up the business. segment. on that's cost you for what effect, bridge, Aluminum to

our any remarks. Mr. for concludes to I'd back to like the question-and-answer this turn And Oplinger session. closing over conference

you. Thank

remarks. Just a of closing couple

anticipating you We the XXXX. progress from can from the safety the that close already captured on the we We're the improvement of we're operations on over the about programs made to of As we've results, quarter. in and across lot half a see the Limited August company. X, for transaction improvement Alumina both the improved and

overall, we October. a call. further thank and progress was to lot when forward in you progress. I'd a and speak we quarter, So of made for look again to sharing it busy like I Molly joining our

The conference has today's presentation. you attending now concluded. Thank for

time. at your disconnect now may You this lines