Chalco Posts Narrower First-Quarter Loss as Sales IncreaseBloomberg News
Aluminum Corp. of China Ltd., the nation’s biggest producer of the lightweight metal, reported a narrower first-quarter loss and sales increased.
Net loss was 975 million yuan ($158 million) in the three months ended March 31, compared with a loss of 1.09 billion yuan a year earlier, the Beijing-based company said in a statement to the Hong Kong stock exchange yesterday. Chalco, as the company is known, was expected to post a 1.81 billion yuan loss, according to the average estimate of three analysts surveyed by Bloomberg. Sales rose 1.9 percent to 34.2 billion yuan in the quarter.
Chalco is unlikely to post an operational turnaround amid weak metal prices and cost challenges, Barclays Plc analysts led by Ephrem Ravi said in March. Aluminum prices in London dropped 8 percent on average in the quarter from a year earlier amid an industry glut. The company has now posted losses for six straight quarters, according to data compiled by Bloomberg.
Chalco slid 2.7 percent to close at HK$2.87 in Hong Kong yesterday, before the earnings announcement. The Hang Seng Index gained 0.7 percent. Chalco has dropped 24 percent in the past 12 months, compared with an 8.4 percent gain in the benchmark.
Chief Executive Officer Xiong Weiping unveiled a plan in August 2010 to diversify into rare earths, coal and iron ore to reduce dependence on smelting. The approach should be “re-defined to focus on fixing the aluminum business,” Vanessa Lau, an analyst at Sanford C. Bernstein & Co., said in an April 23 report.
“There is a way to turn around Chalco, but will take real restructuring and change in management mindset,” Lau wrote.
— With assistance by Helen Yuan