Alcoa shares dip despite 25% earnings boost in FY25

ASX 200 mining share Alcoa Corporation CDI (ASX: AAI) is in the red after the aluminium giant released its full-year FY25 earnings.

On Friday morning, Alcoa shares opened at $93.61 and have fallen 2% to $91.76 at the time of writing.

Alcoa produces and sells bauxite, alumina, and aluminium products in the United States, Australia, Spain, Canada, and elsewhere.

Here are the 4Q FY25 and full-year FY25 results.

Alcoa shares weaken despite strong signs in fourth quarter

The highlight of 4Q FY25 was a doubling in the earnings before interest, taxes, depreciation, and amortisation (EBITDA) compared to 3Q.

Here are the numbers:

• Revenue increased to $3.4 billion, up 15% on 3Q FY25
• Net income of $226 million, down 2.6% on 3Q FY25
• Adjusted net income increased to $335 million vs. a loss of $6 million in 3Q FY25
• Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) excluding special items of $546 million, up 102% on 3Q FY25
• Generated $537 million in cash from operations, up $452 million on 3Q FY25
• Cash balance of $1.6 billion as of 31 December

Here are the details for full-year FY25:

• Revenue increased to $12.8 billion, up 8% on FY24, equating to $4.42 per share vs. 26 cents per share in FY24
• Adjusted net income increased to $1.2 billion, up from $60 million in FY24
• Adjusted EBITDA excluding special items increased to $2 billion, up 25%
• Generated $1.2 billion in cash from operations, up $563 million on FY24
• Reduced total debt to $2.4 billion and adjusted net debt to $1.5 billion

What else happened in FY25?

Alumina production dipped 4% in FY25 primarily due to the full curtailment of the Kwinana refinery in Western Australia in the year prior.

Aluminium production increased 5%, mainly due to the restart of the Alumar smelter in Brazil, San Ciprián in Spain, and Lista in Norway.

Alcoa said it set annual production records at five aluminium smelters and at one alumina refinery over the year.

Revenue increased primarily due to higher average realised prices for aluminium, and higher volumes and prices from bauxite offtake and supply agreements.

This was partially offset by lower average realised prices for alumina and lower aluminium shipments.

The company noted increased tariff costs on imports into the US after President Donald Trump introduced a 50% tariff last year.

The company completed several strategic initiatives in FY25, including the divestment of its stake in the Ma'aden joint venture in July.

It also formed a joint venture with IGNIS Equity Holdings to support the continued operations of its San Ciprián complex in Spain.

News on Australian operations

Alcoa announced the permanent closure of Kwinana in September and received a favourable decision in an Australian tax dispute.

In October, the US and Australian Governments announced a US$200 million concessional equity finance package to help fund a new gallium plant to be co-located at Alcoa's Wagerup alumina refinery in Western Australia.

Alcoa shares got a 7.5% boost on the day of the announcement.

The gallium plant is a joint venture between Alcoa and Japan's Sojitz Corporation, with backing from the Japanese Government.

Gallium, which is naturally present in bauxite and can be extracted during the refining process, is on the US Critical Minerals List.

It is an essential input for semiconductors and defence sector technologies.

The deal is part of a US-Australia commitment to get a US$8.5 billion pipeline of critical materials projects into production over time.

What did Alcoa management say?

Alcoa President and CEO William F. Oplinger said:

Reflecting on 2025, we maintained our pace of delivering on key operational, strategic, and capital allocation objectives, while
setting numerous production records.

We continue to build on our positive momentum through disciplined operational and financial execution, along with strategic initiatives to maximize value creation.

What's next for Alcoa?

Alcoa expects annual alumina production of between 9.7 and 9.9 million tonnes in FY26.

This would be higher than the FY25 production of 9.64 million tonnes due to productivity improvements.

In Australia, Alcoa is seeking regulatory approval to extend its Western Australia bauxite mining.

It wants to expand into the Myara North and Holyoake areas, and re‑enter the O'Neil region.

These would be new mining zones beyond its existing Huntly and Willowdale mines.

This month, the company provided its responses to a Western Australia Environmental Protection Authority (WA EPA) regarding the feedback gathered during a 12-week public comment period for Alcoa's mining activities in Australia.

These activities include the mine plan for Myara North and Holyoake and the rolling five-year plan for 2023 to 2027.

Alcoa said:

The Company is committed to continuing to work collaboratively with stakeholders to achieve Ministerial decisions by the end of 2026.

Alcoa CDI share price snapshot

The price of Alcoa CDI shares has risen by more than 90% over six months as aluminium prices have improved.