Alumina and bauxite production for the AWAC joint venture was in line with expectations. Higher realised alumina prices in the second quarter provided higher cash distributions and boosts Macquarie’s forecasts for the interim dividend.
The dividend yield is 5.5% for 2021 and 2022 on forecasts and in a spot scenario. The broker expects continued margin suppression as cost pressures remain evident in the second half. Underperform maintained. Target is reduced to $1.30 from $1.50.
Sector: Materials.
Target price is $1.30.Current Price is $1.61. Difference: ($0.31) – (brackets indicate current price is over target). If AWC meets the Macquarie target it will return approximately -24% (excluding dividends, fees and charges – negative figures indicate an expected loss).
