Costs erode Chalco's H2 profit
By Richard Fu |
March 2, 2011, Wednesday
|
Print Edition
Print Edition
ALUMINUM Corp of China Ltd, the nation's largest producer of the light metal, posted a lower-than-expected second-half profit as rising production costs offset higher product prices.
The company, known as Chalco, expects low profit in the industry due to high costs and excess capacity although aluminum price will rise this year partly because of inflation and currency depreciation.
Chalco earned 247.4 million yuan (US$37.6 million) in the second half of 2010, reversing a loss of 1.1 billion yuan in the year-earlier period, according to calculations based on its annual results released yesterday. A Bloomberg News survey of 13 analysts estimated the half-year profit in 2010 at 429.7 million yuan.
The company's full-year profit was 778 million yuan on sales of 121 billion yuan.
Higher coal prices and the cancellation of preferential power tariffs have sparked a 9.1 percent rise in electricity costs for Chalco last year, Chairman Xiong Weiping said in Shanghai.
A Goldman Sachs report said that because Chalco's production remained at a very high level, "any further investment in its alumina/aluminum business would likely not be profitable in the near term."
The company, known as Chalco, expects low profit in the industry due to high costs and excess capacity although aluminum price will rise this year partly because of inflation and currency depreciation.
Chalco earned 247.4 million yuan (US$37.6 million) in the second half of 2010, reversing a loss of 1.1 billion yuan in the year-earlier period, according to calculations based on its annual results released yesterday. A Bloomberg News survey of 13 analysts estimated the half-year profit in 2010 at 429.7 million yuan.
The company's full-year profit was 778 million yuan on sales of 121 billion yuan.
Higher coal prices and the cancellation of preferential power tariffs have sparked a 9.1 percent rise in electricity costs for Chalco last year, Chairman Xiong Weiping said in Shanghai.
A Goldman Sachs report said that because Chalco's production remained at a very high level, "any further investment in its alumina/aluminum business would likely not be profitable in the near term."
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