) announced the sale of its 378-megawatt Tapoco Hydroelectric
Project to Brookfield Renewable Energy Partners, a Canadian
company engaged in operating renewable energy platforms
Tapoco is a four-station hydroelectric project located on the
Little Tennessee and Cheoah Rivers in eastern Tennessee and
western North Carolina. The sale includes four hydroelectric
power generating stations and dams, 86 miles of transmission line
and a total of 14,500 acres of land surrounding Tapoco.
Alcoa was responsible for the construction of the Tapoco
Hydroelectric Project and secured its license from the Federal
Energy Regulatory Commission to power its aluminum smelting and
rolling mill operations in Alcoa, Tennessee.
Brookfield Renewable Energy Partners operates one of the
largest publicly-traded, pure-play renewable power platforms
globally. Its portfolio is primarily hydroelectric and totals
approximately 5,000 megawatts of installed capacity.
Last month, Alcoa reported a loss of $143 million or 13 cents
for the third quarter of 2012, driven by a hefty charge
associated with environmental remediation and legal settlement,
and lower aluminum pricing. It compared with a profit of $172
million or 15 cents a share in the year-ago quarter.
Excluding one-time special items (a $175 million charge mainly
related to environmental remediation of the Grasse River and the
settlement of a civil lawsuit with Aluminum Bahrain), Alcoa
earned $32 million or 3 cents a share in the quarter compared
with the Zacks Consensus Estimate of a break even result. The
company incurred a $40 million charge associated with the legal
settlement in the quarter.
Revenues decreased 9.1% year over year and 2.2% sequentially
to $5,833 million, but were ahead of the Zacks Consensus Estimate
of $5,565 million. Alcoa said that aluminum prices dropped 17%
year over year and 5% sequentially in the third quarter.
Alcoa witnessed strong productivity growth in its upstream and
downstream businesses in the quarter on the back of higher
utilization rates, process innovations, lower scrap rates and
usage reductions. The company saw healthy demand across the
aerospace and automotive markets in the quarter.
The company has lowered its global aluminum demand forecast
for 2012 to 6% from its earlier expectation of 7%, owing to the
slowdown in China. The company, however, expects the aluminum
market to double in 2020 from the 2010 level as the market is
already ahead of the required 6.5% compound annual growth
Pennsylvania-based Alcoa Inc. is among the world's leading
producers of primary and fabricated aluminum and alumina. The
company competes with
Aluminum Corporation Of China Limited
). It currently retains a Zacks #3 Rank, which translates into a
short-term (1 to 3 months) Hold rating and we have a long-term
Neutral recommendation on the stock.
ALCOA INC (AA): Free Stock Analysis Report
ALUMINUM CP-ADR (ACH): Free Stock Analysis
RIO TINTO-ADR (RIO): Free Stock Analysis
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