ASX:AWC

Stock Analysis Report

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Executive Summary

Alumina Limited, through its 40% interest in Alcoa World Alumina and Chemicals, engages in bauxite mining, alumina refining, and aluminum smelting businesses.


Snowflake Analysis

Adequate balance sheet and fair value.


Similar Companies

Share Price & News

How has Alumina's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AWC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.5%

AWC

3.6%

AU Metals and Mining

3.6%

AU Market


1 Year Return

-29.4%

AWC

-3.2%

AU Metals and Mining

-10.7%

AU Market

Return vs Industry: AWC underperformed the Australian Metals and Mining industry which returned -3.2% over the past year.

Return vs Market: AWC underperformed the Australian Market which returned -10.7% over the past year.


Shareholder returns

AWCIndustryMarket
7 Day2.5%3.6%3.6%
30 Day1.2%1.5%3.1%
90 Day25.3%27.3%21.3%
1 Year-25.1%-29.4%1.9%-3.2%-7.1%-10.7%
3 Year5.3%-18.2%67.4%44.1%17.6%2.0%
5 Year64.2%13.3%118.6%74.7%36.1%6.6%

Price Volatility Vs. Market

How volatile is Alumina's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Alumina undervalued compared to its fair value and its price relative to the market?

22.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AWC (A$1.66) is trading below our estimate of fair value (A$2.14)

Significantly Below Fair Value: AWC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AWC is poor value based on its PE Ratio (15.4x) compared to the Metals and Mining industry average (10.4x).

PE vs Market: AWC is good value based on its PE Ratio (15.4x) compared to the Australian market (16x).


Price to Earnings Growth Ratio

PEG Ratio: AWC is poor value based on its PEG Ratio (76.5x)


Price to Book Ratio

PB vs Industry: AWC is overvalued based on its PB Ratio (1.9x) compared to the AU Metals and Mining industry average (1.7x).


Next Steps

Future Growth

How is Alumina forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

0.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AWC's forecast earnings growth (0.2% per year) is below the savings rate (2.3%).

Earnings vs Market: AWC's earnings (0.2% per year) are forecast to grow slower than the Australian market (15.1% per year).

High Growth Earnings: AWC's earnings are forecast to grow, but not significantly.

Revenue vs Market: AWC's revenue is expected to decline over the next 3 years (-9.5% per year).

High Growth Revenue: AWC's revenue is forecast to decline over the next 3 years (-9.5% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AWC's Return on Equity is forecast to be low in 3 years time (10.3%).


Next Steps

Past Performance

How has Alumina performed over the past 5 years?

53.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AWC has high quality earnings.

Growing Profit Margin: AWC's current net profit margins are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: AWC has become profitable over the past 5 years, growing earnings by 53.3% per year.

Accelerating Growth: AWC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AWC had negative earnings growth (-66.3%) over the past year, making it difficult to compare to the Metals and Mining industry average (-8.4%).


Return on Equity

High ROE: AWC's Return on Equity (12%) is considered low.


Next Steps

Financial Health

How is Alumina's financial position?


Financial Position Analysis

Short Term Liabilities: AWC's short term assets ($17.0M) exceed its short term liabilities ($1.2M).

Long Term Liabilities: AWC's short term assets ($17.0M) do not cover its long term liabilities ($70.5M).


Debt to Equity History and Analysis

Debt Level: AWC's debt to equity ratio (3.9%) is considered satisfactory.

Reducing Debt: AWC's debt to equity ratio has reduced from 4.8% to 3.9% over the past 5 years.

Debt Coverage: AWC's debt is well covered by operating cash flow (520.9%).

Interest Coverage: Insufficient data to determine if AWC's interest payments on its debt are well covered by EBIT.


Balance Sheet


Next Steps

Dividend

What is Alumina current dividend yield, its reliability and sustainability?

6.97%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: AWC's dividend (6.97%) is higher than the bottom 25% of dividend payers in the Australian market (2.52%).

High Dividend: AWC's dividend (6.97%) is in the top 25% of dividend payers in the Australian market (6.45%)


Stability and Growth of Payments

Stable Dividend: AWC's dividend payments have been volatile in the past 10 years.

Growing Dividend: AWC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (107.6%), AWC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: AWC's dividends in 3 years are not forecast to be well covered by earnings (90.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.5yrs

Average management tenure


CEO

Mike Ferraro (60yo)

3.08yrs

Tenure

US$2,041,966

Compensation

Mr. Michael Peter Ferraro, also known as Mike, LLB (Hons), has been Non-Executive Director of Helloworld Travel Limited (formerly known as Helloworld Limited) since January 1, 2017. He was previously a Par ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD0.00) is below average for companies of similar size in the Australian market ($USD2.20M).

Compensation vs Earnings: Mike's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Michael Ferraro
MD, CEO & Executive Director3.08yrsUS$2.04m0.019% $901.5k
Stephen Foster
General Counsel & Company Secretary17.58yrsUS$939.80k0.034% $1.6m
Galina Kraeva
GM of Finance & Financial Controllerno dataUS$626.91k0.0039% $186.9k
Andrew Wood
Group Executive of Strategy & Development11.83yrsUS$617.40k0.012% $590.3k
Grant Dempsey
Chief Financial Officer1yrno datano data
Charles Smitheram
Manager of Treasury & Investor Relationsno datano datano data

7.5yrs

Average Tenure

Experienced Management: AWC's management team is seasoned and experienced (7.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Ferraro
MD, CEO & Executive Director3.08yrsUS$2.04m0.019% $901.5k
John Bevan
Non-Executive Director2.5yrsUS$183.41k0.010% $498.1k
William Day
Independent Chairman of the Board2.25yrsUS$358.14k0.0046% $222.3k
Chen Zeng
Non-Executive Director7.33yrsUS$175.20k0.00017% $8.1k
Emma Stein
Independent Non-Executive Director9.42yrsUS$205.31k0.0029% $140.5k
Deborah O'Toole
Independent Non-Executive Director2.58yrsUS$195.73k0.0014% $66.4k

4.5yrs

Average Tenure

61.5yo

Average Age

Experienced Board: AWC's board of directors are considered experienced (4.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: AWC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Alumina Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Alumina Limited
  • Ticker: AWC
  • Exchange: ASX
  • Founded: 1970
  • Industry: Aluminum
  • Sector: Materials
  • Market Cap: AU$4.780b
  • Shares outstanding: 2.88b
  • Website: https://www.aluminalimited.com

Location

  • Alumina Limited
  • IBM Centre
  • Level 12
  • Southbank
  • Victoria
  • 3006
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AWCM.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1980
AWCASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1980
WMC1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1980
WMC1XTRA (XETRA Trading Platform)YesOrdinary SharesDEEURJan 1980
AWCCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1980
AWCM.YOTCPK (Pink Sheets LLC)SPON ADR EACH REP 4 ORD SHSUSUSDJan 1990
WMCDB (Deutsche Boerse AG)SPON ADR EACH REP 4 ORD SHSDEEURJan 1990

Biography

Alumina Limited, through its 40% interest in Alcoa World Alumina and Chemicals, engages in bauxite mining, alumina refining, and aluminum smelting businesses. The company has a network of bauxite mines and alumina refineries in Australia, the United States, Guinea, Brazil, and Spain, as well as an interest in a smelter in Victoria Australia; and a bauxite mine and alumina refinery in Saudi Arabia. It is also involved in the shipping operations, including transportation of alumina, aluminum, and raw materials. The company was formerly known as WMC Limited and changed its name to Alumina Limited in December 2002 as part of the demerger of the WMC Group. Alumina Limited was incorporated in 1970 and is headquartered in Southbank, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/03 10:33
End of Day Share Price2020/07/03 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.