Thank you for standing by, and welcome to the Alumina Limited 2023 full year results conference call. All participants will be in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to turn the conference over to Mr. Mike Ferraro, Chief Executive Officer. Please go ahead. Welcome, everyone. Thank you for joining Alumina Limited's presentation of our full year results for 2023. Before I proceed further, please refer to the disclaimer. Also, note all references to dollars refer to U.S. dollars, unless otherwise specified. I would like first to take you through the proposed transaction with Alcoa, the details of which were announced yesterday, before I move to discuss the 2023 results. The transaction involves Alcoa acquiring Alumina for a scrip consideration of 0.02854 Alcoa shares per Alumina share. The proposal implies a 19.5% premium to the average exchange ratio over the last 12 months, and represents a 31.6% ownership stake for Alumina shareholders in the merged entity. This proposal follows earlier engagement with Alcoa and a period of negotiation, which included commercial, financial, and legal due diligence information. As a next step, Alumina has entered into an exclusivity deed, which grants Alcoa 20 business days of exclusivity, with an intention that both parties would negotiate and execute definitive transaction documentation within this timeframe. Now, we believe the proposed transaction is in the best interest of Alumina shareholders and provides a number of strategic benefits. First, it's a logical combination that unifies the ownership of AWAC, with Alumina shareholders exchanging their 40% interest in a minority non-operating JV for a 31.6% direct interest in the operating entity. The unified ownership of AWAC would simplify corporate ownership, streamline decision-making, and remove duplication of corporate costs. Second, the proposed transaction provides Alumina shareholders exposure to a leading global pure-play upstream aluminum company with a geographically diversified portfolio across bauxite, alumina, and aluminum. Alumina shareholders will benefit from increased exposure to aluminum, a key commodity for energy transition and decarbonization, while maintaining significant ownership in AWAC assets. Third, the merger will enhance capital structure and eliminate inefficiencies embedded in the JV structure, resulting in financial synergies. Finally, the combined entity would have increased financial flexibility and greater strategic optionality, providing a better platform for growth. In summary, we believe it is a logical combination that unifies the ownership of AWAC, provides vertical integration and diversification benefits, and enhances capital structure for our shareholders. Turning to the results, Alumina Limited recorded a net loss after tax of $92 million, excluding significant items, and made a large equity contribution to the AWAC joint venture. As a result, no final dividend was declared. While the results were disappointing, AWAC has recently achieved a number of milestones fundamental to improved performance for Alumina Limited. In December, the WA government announced it had approved AWAC's latest five-year mine plan for 2023-2027. This approval, together with an exemption allowing AWAC to continue to operate during any EPA assessment of the mine plan, provides increased confidence for our WA operations until the next mine move to Myara North and Holyoake. Also, in December, Alcoa announced it was taking action at the San Ciprián refinery to reduce losses and to work towards a longer-term solution. More recently, in January, the curtailment of the Kwinana refinery in WA was announced. The combination of these actions provides AWAC with a strong foundation to create a significantly higher quality refining portfolio. The other two refineries in WA, Pinjarra and Wagerup, are first quartile on the global alumina refinery cost and emissions curves, and they remain strongly cash flow generative at current API prices. In addition to these actions, AWAC management is focused on profitability improvement across all aspects of the portfolio. Near-term improvements are underway, including reduced caustic soda, and lime costs. Actions to reduce controllable operating costs are expected to deliver benefits in 2024 and 2025. Now, I'd like to provide an update on the current Alumina market. The API averaged $343 a ton in 2023. With the optimism of China's post-COVID reopening and supply disruptions at Kwinana, the alumina price spiked in February 2023 to $371 a ton. However, prices retraced due to a weaker aluminum market. The API Alumina ratio was trading within a narrow range last year.... The API surged from November lows of $326 a ton to $372 a ton by mid-January this year. This increase was primarily driven by bauxite supply concerns from Guinea and Chinese refinery curtailments due to bauxite shortages and environmental audits. This year to date, the API has averaged 367 per ton, and is currently $364. As mentioned earlier, our ongoing operating refineries in WA are first quartile on the global cost curve and at current API, we expect them to deliver high margins this year. Any further supply disruptions, such as the Kwinana curtailment, could trigger more upside for alumina prices. Now Galina will take you through the financials. Thank you, Mike, and good morning, all. I will start with review of AWAC performance before addressing Alumina Limited results. In 2023, AWAC recorded an EBITDA of $165 million, and net loss after tax of $318 million. Excluding significant items, EBITDA was $210 million, and loss after tax was $172 million. AWAC cash flow from operations was -$10 million. Let's go through AWAC operational performance in more details. Alumina production of 10.3 million tons was approximately 1.5 million tons lower compared to 2022. In Western Australia, production volume reduced mostly due to the processing of the lower bauxite grades and curtailment of one digester at Kwinana Refinery. Curtailment was initially in response to a statewide shortage of natural gas, and then was extended to provide more time to work through the mining approval process. Higher maintenance and outages at Wagerup Refinery also contributed to the lower production in WA. At the Alumar refinery, a ship-to-shore conveyance system failure and significant maintenance project for the Alumina ship loader affected production volume in the first half of the year. A Brazil-wide electricity blackout and ongoing voltage sag affected refinery production in the second half of the year. San Ciprián refinery operated at approximately 50% of the capacity in 2023 after reducing production in second half of 2022. AWAC cash cost of production averaged $308 per ton, an increase of $4 per ton compared to the previous year. Key drivers for the increase in production costs were unfavorable impact of lower bauxite grades in WA, absorption of fixed costs due to the lower production levels, particularly at San Ciprián and Kwinana refineries, higher maintenance costs, and higher caustic costs due to the time lag in inventory flow. These cost increases were offset by lower energy costs at San Ciprián and Alumar refineries. Earlier in presentation, Mike highlighted the impact of decisions related to the future of Kwinana and San Ciprián refineries. These slides outline the 2023 performance of AWAC portfolio, excluding Kwinana and San Ciprián. Alumina production for the year was 8.1 million tons. Production improved in the second half of the year as Alumar recovered from equipment failures and Pinjarra performed better than expected, processing lower grades of bauxite. Production cash costs, excluding Kwinana and San Ciprián, averaged $275 per ton, resulting in average margin of around $70 per ton against the one-month lagged API. Turning our attention to AWAC capital projects. 2023 total capital expenditure of $279 million was similar to the previous year, with majority spent on residue storage areas at Alumar and Pinjarra refineries and tailings dam expansion in Brazil. The Alumar debottlenecking project was the most significant growth project and is still ongoing, with some expenditure deferred into 2024. Work on residue storage areas and tailings dams will continue to form majority of capital expenditure. In addition, planning for the Huntly mine move will commence this year, and capital allocations are included for the cost savings initiatives in Brazil and longer-term water treatment at Kwinana. The current estimated total capital expenditure for 2024 is approximately $360 million. However, similar to the previous years, AWAC will be reassessing the level of required expenditure, especially for the projects that are in planning stages, and will continue to monitor the cash outlay throughout the year. Moving to the full year outlook. In 2024, we expect alumina production to be approximately 9.4 million tons, 900,000 tons lower than 2023, as a result of Kwinana Refinery curtailment and assuming San Ciprián production remains around 50% capacity. Alumina shipments are expected to range between 12.4 million tons and 12.7 million tons. The difference to production reflects volume that will be sourced externally to cover customer contracts, as well as normal level of trading activity.... Year- on- year, we expect a modest improvement in the cash cost of production, as caustic and energy price benefits will be offset by full- year impact of the lower bauxite grade. Similar to last year, the production cost will be high in the first half of the year due to the seasonal maintenance and impact of the Kwinana curtailment. Aluminum production is forecast to be around 161,000 tons, and total third-party bauxite shipments are expected to be approximately 7 million tons. As announced in January, AWAC is expected to incur cash outlays related to Kwinana curtailment of approximately $130 million in 2024. Environmental and asset retirement obligation payments, including restructuring related items for closed assets, increased by $34 million, mostly reflecting higher rates of mine rehabilitation in Western Australia and Brazil. There will be no tax payments related to the prior year in 2024. Now turning to Alumina Limited result. Alumina Limited recorded a net loss after tax of $150 million. Excluding significant items, net loss after tax was $92 million. This reflects an underlying performance of AWAC joint venture and challenging market conditions in 2023. With significant portfolio action announced and mine plan approval secured in Western Australia, AWAC will continue to focus on operational improvement across all assets, positioning to benefit from market improvements and medium-term opportunities, such as an improved bauxite grade following mine moves in Australia. With that, I will hand you back to Mike. Thanks, Galina. AWAC has continued to improve its ESG performance despite the financial challenges faced during 2023. Last year, there were no fatalities at AWAC facilities, and we have maintained fatality-free operations since 2017. While AWAC's goal is zero fatalities and serious injuries, last year there was one serious injury in our operations. AWAC achieved compliance with the global industry standard on tailings management in August 2023 for all its very high and extreme consequence dams. This required significant effort and is aligned with Alcoa's commitment to the ICMM requirements. Alcoa is continuing to work on the remaining facilities with lower consequence category ratings, which are due to be in conformity by August 2025. As at December 2022, AWAC had reduced its carbon emissions by 47% from a 2010 baseline, exceeding its target of 45% reduction by 2030. Alumina Limited is now a signatory to the Aluminium Industry Greenhouse Gas Initiative, launched by the IAI, and to transparently and publicly track the ambition and progress of its member companies' greenhouse gas emissions reductions. During the year, the Australian government released a new strategic materials list. This includes aluminum, among other materials, as an essential commodity for the global transition to net zero and priority technologies. This is an important recognition for the aluminum industry and demonstrates that aluminum can continue to play an important role in powering Australia's economy. Alcoa of Australia received WA approvals for a 23-27 mine plan and a Section 6 exemption in December 2023. A number of commitments were made to address key environmental factors and respond to community and stakeholder expectations as AWAC transitions to a modern approvals framework for the WA operations. These commitments include enhancing protection for drinking water, such as no clearing for mining within 1 km of public drinking water reservoirs. Reducing impacts on forest clearing, which includes capping clearing rates at 800 hectares per annum across Huntly and Willowdale bauxite mines, and increasing current rehabilitation rates by 2027 to more than 1,000 hectares per annum. Additionally, Alcoa is increasing transparency by publishing the 5-year mine plan and associated management plans on the company's website, as well as increasing community certainty, modernizing approvals, and protecting cultural heritage. Now, a bit more detail on the market. Global primary aluminum demand in 2023 grew by 1%. Aluminum consumption ex-China saw a contraction as the metals-intensive manufacturing sector experienced little to no growth. This was especially true in Europe, which suffered steep falls in industrial production as higher borrowing costs continued to be a drag on the demand for aluminum. Demand weakness in the rest of the world was more than offset by strong demand from China. This was driven primarily by the electrical sector, which witnessed substantial growth due to large-scale installations of solar power capacity, accompanied by an increase in exports of solar panels. China has recently introduced a series of measures to support the sluggish construction sector, which may stabilize aluminum demand in 2024. LME prices rallied early in 2023 as a result of improved market sentiment following China's post-COVID reopening. Market exuberance quickly fizzled out due to a weaker than anticipated demand, and prices fell in early February before trading within the range of $2,100-$2,300 for the rest of the year. U.S. Midwest premium reached a high of $0.29 per pound in February, before trending down for the rest of the year and ending at $0.19 per pound. European premiums also ended the year lower, while the Japanese premium remained relatively flat through 2023, indicating a subdued market in these regions. Global primary aluminum production reached a record level of 71 million tons in 2023, representing a 2% year-over-year growth. Global metallurgical alumina demand mirrored the growth of primary aluminum production. Global alumina production outside China dropped 1% due to supply disruptions in Australia, Europe and Brazil, more than offsetting expansions in Indonesia and India. With limited supply growth outside China, the Alumina market remained tightly balanced in 2023. This will be more pronounced following the curtailment of Kwinana during the second quarter of this year. Chinese Alumina production costs fell by 8% in 2023, driven by lower caustic soda and energy prices. Chinese refineries process lower quality domestic bauxite and higher priced seaborne bauxite, which offset some of the cost savings. The average Alumina production cost in the rest of the world also fell by 8%, driven primarily by lower fuel and caustic costs. AWAC was impacted by lower grade bauxite in 2023, and its average cash cost increased by 1% to $308 a ton. As I mentioned earlier, AWAC is focused on a number of profitability improvement initiatives across the portfolio, which are expected to flow through this year and next. In summary, 2023 was a difficult year for AWAC and Alumina Limited, but the milestones achieved in late 2023 and a positive market outlook provide more confidence going into 2024. Lower input costs, the upcoming curtailment of Kwinana, combined with the approval of the mine plan in WA, and our close decision to take action at the San Ciprián Refinery, supports improved performance. We expect AWAC's production costs to reduce in 2024. These actions provide AWAC with a strong foundation to move forward to create a higher quality refinery portfolio. On the demand side, a moderate recovery in aluminum demand is expected for this year, driven by improved industrial production growth and a stabilizing construction sector. Aluminum is an essential material in a decarbonized world due to its lightweight, recyclable, durable, and ductile properties. In the longer term, demand for aluminum, especially green aluminum products, including AWAC's low-carbon alumina, is expected to grow substantially. The proposed transaction with Alcoa creates the potential for our shareholders to have exposure to a fully integrated and diversified aluminum value chain, which includes AWAC. That now concludes our formal remarks. I'll now hand back to the moderator for questions. Thank you. If you wish to ask a question, please press Star then one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star then two. If you are on a speakerphone, please pick up your handset to ask a question, and please limit yourself to two questions each. Our first question comes from Paul Young, from Goldman Sachs. Please go ahead. Thanks. Morning, Mike. Morning, Galina. Mike, yeah, hi, mate. I guess the focus, you know, really has we need to start on the deal. I mean, it's been a long time coming and does seem a little bit of a letdown. You know, I think some are probably looking for a bigger premium. But, you know, it's all about relative value. But, you know, just in your comments, it does seem like you've made a call on aluminum here. Can I just talk about, though, that, you know, how you've assessed the value of Alcoa for AWAC shareholders? If you look at, I guess, the near-term multiples, they look fairly aligned, Alcoa and AWAC, and that's EBITDA, but, you know, surely you haven't assessed it just on that. So how actually have you assessed the value of Alcoa for AWAC shareholders? Have you, have you come up with a view on NAV? Thanks. We've done a lot of work on valuation. And, Paul, we're not new at this because there's been a range of negotiations and discussions with Alcoa over the years, and it's been really hard to settle on relative value, depending on where the share prices were at the time. It's like trying to pin the tail on the donkey. And this time it's basically aligned, and now I think there could be some, you know, feedback that, well, we're at the low point of the cycle and our share price is relatively low, we should be doing better. But the reality is, the relativities are aligned, not only in the short term, but also in the long- term. But more importantly, we really see this as makes logical sense. I've been of the view for some time now, as our board, that being part of a larger, fully integrated supply chain is really important, particularly as the rest of the industry is moving in that direction. Bringing the two assets together into one and giving our shareholders exposure to the aluminum segment that we don't have, I think is really important for the longevity of this venture going forward and its success. So we have taken into account long-term value on an NPV and other valuation metrics. We've looked at historical contribution, potential forward contributions, done a lot of assessment, but really the key message here, Paul, it's not just about the short term, it's the upside in the long term for our shareholders holding Alcoa shares. Okay. Just to confirm, Mike, you're saying on a price to NAV basis, you think they're aligned as well? I think they're largely aligned, yes. Okay. Thanks. And then, Mike, if this didn't come along, what was option two? Was option two a capital raising? Listen, Paul, as you know, our debt levels are about $300 million, and we've got a $500 million facility, so it all depends on how the year pans out. You know, we've given guidance on what the CapEx will be and the likely cost per ton. But what really is the wild card here is what API will do. You know, if we get an upswing in API due to supply disruptions such as Kwinana, then the prospects of a capital raising reduce. So that could be a possibility. As I've said in the last year, we've been monitoring this closely, but it's not in the short term. Okay, thanks. And just a quick one on the market, and more specifically around the 3 million tons or so of spot purchases that Alcoa has to make this year, you know, to make up for shortfalls across Kwinana and elsewhere. Can you just expand on where you're buying that from? Which markets, is it Pacific or Atlantic? Yeah, it'll be all over, because it's not just a straight purchase. There'll be swaps and so forth, so it's really all over the market, so that it provides full flexibility. Okay. All right, Mike. Thank you. I'll pass it on. Thanks, Paul. Our next question comes from Adam Baker from Macquarie. Please go ahead. Morning, Mike and team. Sounds like you answered most of my question in the last question, but just more of a question on the why now for the non-binding deal with Alcoa. It sounds like discussions have been going for a long period of time, but just wondering if it's been more driven by the management changes at Alcoa? Well, you probably should ask them that, but, we've certainly been negotiating this time for quite some time, and, but certainly, Bill Oplinger and I have a view that, the two entities would make sense logically to be merged. It was just a question of timing and relative value, as I discussed before. So I think you can't say that the stars and the moon and the sun is always fully aligned, but it was pretty close to that this time, so it made sense to do it. Thanks. And contingency plans, you know, balance sheet, almost $300 million of net debt, another $200 million headway there, plus large CapEx profile for this year. How are you thinking from that perspective? Well, at the moment, we're pretty comfortable, as you know, as you can see, we've got headroom, notwithstanding the CapEx, and as I mentioned before, the API is an important swing factor here, so we're monitoring it regularly. Right now, where we sit, we're pretty comfortable. Thanks. Thank you. Our next question comes from Glyn Lawcock from Barrenjoey. Please go ahead. Morning, Mike. Might be a similar question to I asked Bill yesterday. I mean, did you... Had they all discussed the potential for any cash element, that, like, a dividend, to try and release any of the franking credits? Or is that something you think is just a bridge too far? No, there were a whole range of discussions and a whole range of permutations. You know, you just don't start with a clean deal and close it with a clean deal, Glynn. But at the end of the day, collectively, and we came to the view that we thought there was more upside for our shareholders in holding Alcoa shares, and so we decided that that was the best approach, taking into account, the potential for our shareholders, to gain forward and, in that way. I appreciate that, but I mean, no thought to, like, a partial amount of cash just to try and release some of the franking? 'Cause I guess we're gonna lose that and never see it again. No, but you're right. There was quite a lot of thought and discussion around that, but ultimately we landed on the share exchange. Is that a reflection, then? I'm just looking at the CapEx guidance for this year, $650 million out the door on a 100% basis. I mean, probably a fair bit above what everyone was thinking in the market. Is that partly the reason as well? You know, this business is gonna be quite cash consuming this year, and I guess next year, too, depending on what happens with San Ciprián. Glenn, you're adding up all the cash items, aren't you? CapEx, because CapEx is $3.36 on 100% level AWAC. Yeah, I think 130 Kwinana and 160- Yeah, so you're including all the, all the items. Yes, with, with Kwinana curtailment, 2024 is quite a cash consuming year. And that's why $360 is just the guidance, and every single project is being looked at very carefully. But to the basis of your question, Glenn, no, that was not the reason to do the deal. We didn't feel under pressure that, you know, our cash outflow position would be such that we needed to do a deal. We did a deal on the right terms at the right time. Because as Mike highlighted, the underlying business is generating cash, and we expect Kwinana closure to be fully funded. So yes, the outlays, cash outlay is higher this year, but the generation is better as well. Yeah, but I guess $650 million in CapEx is $50 a ton, based on your sales, plus another $300 million of costs.... you know, pretty much AWAC is not making any cash, I would imagine, on this sort of cash outflow. So, you know, that's why it has to be a share deal? Because there's just not enough cash for Alcoa to fund everything once they take control. Well, that might be a possibility. You'd probably need to ask them that question. Yeah, that. I'm Bill's best friend at the moment. And then just a final question. Just on the third-party purchases, do you make much of a margin, if anything, or is it sort of a wash at the moment? Well, it depends on when we buy them and when we sell, and that'll have to be worked through. It's a wash. It probably is a wash. It's a wash. Could you tell me what it was in 2023? Was there a loss or a gain made on the third-party purchases and sales in 2023? It's the same. It's on net basis, it's pretty much a wash. Okay. Thanks very much. Thanks, Glynn. Once again, if you wish to ask a question, please press star then one on your telephone and wait for your name to be announced. Our next call comes from Paul McTaggart from Citigroup. Please go ahead. Morning. So in your consideration of the value to AWAC, sorry, to Alcoa, what estimate did you have of the kind of tax synergies from this step-up? I mean, I know in the past, when your share price was much higher, it was quite a substantial number of benefit, tax benefit to Alcoa. But, obviously, it's, you know, it's a much lower share price now. So did you incorporate that in kind of your negotiations? We incorporated a range of factors. Some of them were assumptions, some not. But really, that's probably better a question directed to Alcoa because we don't know how the tax and fiscal structures arrangement are arranged. There may or may not be some step-up, depending on the underlying value of the assets. Just lastly, thanks, if I could just ask, so because I couldn't see it in the slideshow, have you given guidance for calendar 2024 production costs? We did guide to say that it will be modest improvement, so we don't expect a huge difference, because as Kwinana step down in the production, you will have a cost input. Thanks, Galina Thanks, Paul. There are no further questions at this time. I'll now hand it back to Mr. Ferraro for closing remarks. Thank you, everyone, for joining the call this morning, and obviously, front of mind is the proposed transaction. As I indicated, well, as the press has indicated, it's been a long time coming. But certainly, we genuinely believe this is the right future for our company and our shareholders to be part of a vertically integrated chain. That's where the industry is moving. It'll make the combination much stronger to go forward, create a lot more optionality. So, thank you for listening and taking the time today. That concludes our conference for today. Thank you for participating, and you may now disconnect.