Australia's Alumina rises; Macquarie sees near-term earnings dip on Kwinana closure

Alumina

10/01/2024 04:04

(Updates with Citi comments, latest share moves and milestone)
    ** Analysts at Macquarie see near-term earnings downside for
Australia's Alumina Ltd  AWC.AX  after news on curtailing
production at Kwinana Alumina Refinery in Western Australia
starting 2Q24
    ** AWC shares soar as much as 15.8% to A$1.135, their
biggest intraday pct gain since February 2013
        ** AWC stock is top gainer in the ASX 200 benchmark
index  .AXJO 
    ** Macquarie says curtailment costs to put Kwinana into care
and maintenance at Alcoa World Alumina and Chemicals (AWAC), its
joint venture with Alcoa Corporation  AA.N  are set to be $190m
over CY24/CY25
    ** AWAC's remaining WA refineries Pinjarra and Wagerup are
lower cost and higher margin driving lower group unit costs in
the mid- to long-term - Macquarie 
    ** Macquarie sees AWC's earnings per share decreasing 1-5%
in fiscal 2024-2025 and increasing 3-5% in fiscal 2026-2027
    ** Citi says at the current alumina prices, the Western
Australia business is expected by AWC to fully fund costs of
Kwinana in CY24, including shutdown costs
    ** Brokerage raises the price target for AWC by 6% to A$0.85
due to a jump in mid- to long-term earnings 
    ** Stock up 8.3% so far in 2024 

 (Reporting by Roushni Nair and Sameer Manekar in Bengaluru)
 ((Roushni.Nair@thomsonreuters.com;))