[Management View]
Alcoa's management highlighted strong operational performance and safety metrics for Q2 2025. Key strategic moves included the sale of a 25.1% stake in the Ma'aden joint ventures for $1.35 billion and a favorable ruling in a five-year tax dispute in Australia.

[Outlook]
The company lowered its annual aluminum shipment guidance to 2.5–2.6 million metric tons due to operational disruptions. Corporate cost outlook was reduced to $160 million, while interest expense outlook increased to $180 million. Return-seeking CapEx was adjusted to $50 million for 2025.

[Financial Performance]
Revenue for Q2 2025 was $3 billion, down 10% sequentially. Net income was $164 million, with adjusted net income at $103 million. Adjusted EBITDA was $313 million, down $542 million sequentially. Alumina segment revenue declined 28%, while aluminum segment revenue increased 3%.

[Q&A Highlights]
Question 1: How would potential tariffs on Brazil impact Alcoa?
Answer: If alumina is excluded, Alcoa can redirect supply from Western Australia, though it would take time and incur higher shipping costs.

Question 2: Can you discuss the Western Australia contingency plans and their cost impact?
Answer: No impact is anticipated for 2025 or 2026. Contingency plans cover different mining areas, potentially extending to a fifteen-month delay.

Question 3: Can you keep mining lower grade areas if delays extend?
Answer: Current areas will be mined through 2025 and 2026, with contingency plans for up to a fifteen-month delay.

Question 4: Is the $215 million quarterly Section 232 cost offset by Midwest premium gains?
Answer: In Q2, $115 million in tariff costs were partially offset by a $60 million Midwest premium uptick, resulting in a $55 million margin compression.

Question 5: What are the expectations for San Ciprián's profitability in 2026?
Answer: The smelter is expected to be profitable post-ramp-up, but the refinery will struggle with profitability into 2026.

Question 6: Why not restart the spare capacity at Warrick?
Answer: Restarting the fourth line at Warrick requires a $100 million investment and about a year to complete.

Question 7: How does the delayed restart at San Ciprián impact workforce agreements?
Answer: Force majeure was declared, pushing the restart deadline to mid-2026.

Question 8: How is Alcoa handling tariff cost sharing and shifting flows to non-U.S. customers?
Answer: About 30% of Canadian volume can be redirected to non-U.S. destinations, with Midwest premium largely passing on higher tariffs to customers.

Question 9: Is the impact of tariffs net neutral for Alcoa?
Answer: If Midwest premium reacts accordingly, it is net neutral for Alcoa, but U.S. customers face significantly higher prices.

Question 10: What is the status of the Alumar smelter in Brazil?
Answer: Operating at about 92% capacity, with full restart anticipated within the year despite pot failures.

Question 11: What are the plans for the Ma'aden shares?
Answer: No plans to monetize shares during the lockup period; gains and losses will be adjusted in financial reporting.

Question 12: How confident is Alcoa in Spain's power delivery for the San Ciprián restart?
Answer: Measures are being taken to strengthen the electrical system, but no guarantees can be made.

[Sentiment Analysis]
Analysts expressed concerns about tariff impacts and operational delays, while management maintained a cautiously optimistic tone, emphasizing strategic adjustments and contingency plans.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 |
|-------------------------|---------------|---------------|
| Revenue | $3 billion | $3.33 billion |
| Net Income | $164 million | $548 million |
| Adjusted Net Income | $103 million | $645 million |
| Adjusted EBITDA | $313 million | $855 million |
| Alumina Segment Revenue | -28% | - |
| Aluminum Segment Revenue| +3% | - |

[Risks and Concerns]
- Section 232 tariff costs and their impact on margins.
- Operational disruptions at the San Ciprián smelter.
- Delays in Western Australian mine approvals.
- Profitability challenges at the Spanish operations.

[Final Takeaway]
Alcoa faced significant challenges in Q2 2025, including tariff impacts and operational disruptions. Despite these hurdles, the company made strategic adjustments, such as the sale of its Ma'aden stake and favorable tax rulings. Management remains focused on navigating market dynamics and executing contingency plans to ensure long-term value creation for shareholders.