Arconic Inc. has released its Q3 2019 results. The Global Rolled Products (GRP) division reported revenue of USD1.8bn, down 4% year-on-year. Segment operating profit was USD161m, up 50%, driven by favourable pricing in industrial and commercial transport and volume growth in packaging, industrial and aerospace, as well as favourable aluminium prices and net cost reductions. These impacts were partially offset by operational challenges at one plant in the aluminium extrusions business and continued costs associated with the transition of Tennessee’s North American packaging business to more profitable industrial products.
Progress on divestitures
In Q3 2019, Arconic reached an agreement to sell its aluminium rolling mill in Itapissuma, Brazil for USD50m in cash. The transaction is expected to close in Q1 2020. The company also reached an agreement in Q3 to sell its forgings business in the UK for USD62m in cash. The transaction is expected to close in Q4 2019. In Q4 2019, Arconic entered into an agreement to sell its hard alloy extrusions plant in South Korea for USD61m in cash. The transaction is expected to close in Q1 2020. On a year-to-date basis, the company has signed or closed divestitures expected to generate some USD180m in net proceeds.
Separation remains on track
Arconic continues to target the completion of the separation in Q2 2020. The Engineered Products and Forgings businesses (engine products, fastening systems, engineered structures and forged wheels) will remain in the existing company, which will be renamed Howmet Aerospace Inc. at separation. The Global Rolled Products businesses (rolled products, aluminium extrusions, and building and construction systems) will will be named Arconic Corp. at separation.