Alcoa Corp. said it’s boosting its cash position to weather “challenging market conditions,” reassuring investors rattled by uncertainty over the outlook for demand amid the virus pandemic.
The cash balance at the top U.S. aluminum producer increased to US$965 million in the second quarter, a sequential increase of US$136 million, the company said in a statement Wednesday. Alcoa also reported a second-quarter adjusted loss of two cents US a share, compared with a loss of 23 cents US in the first quarter.
The announcement comes three months after the Pittsburgh-based company suspended its market forecast because of a lack of clarity stemming from the coronavirus. Benchmark aluminum prices are still down about seven per cent this year after the virus shut down automakers and other users of the metal. Alcoa has been taking cost-cutting measures that include curtailing one of its U.S. smelters.
“Despite challenging market conditions, our team has lowered production costs, increased output, maintained stable shipments, and improved our balance sheet,” Chief Executive Officer Roy Harvey said in the statement. “We continued to make progress in executing our strategic actions and 2020 programs, and we finished the quarter with a cash balance of nearly one billion dollars.”
The shares gained seven per cent to US$13.49 at 4:41 p.m. in after-hours trading in New York. The stock fell 41 per cent this year through Wednesday’s close.
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