Chalco First-Quarter Loss Widens Amid Lower Aluminum PricesBloomberg News
Aluminum Corp. of China Ltd., the nation’s biggest producer of the lightweight metal, said its first-quarter loss widened as industry overcapacity caused prices to fall.
The Beijing-based company posted a loss of 2.2 billion yuan ($352 million), or 0.16 yuan a share, in the three months ended March 31 from 975 million yuan, or 0.07 yuan a share, a year ago, it said in a statement to the Shanghai Stock Exchange. Sales rose 3 percent to 35.2 billion yuan.
Average aluminum prices in London dropped 14 percent during the quarter from a year earlier following nine years of excess global production, according to data compiled by Bloomberg. Aluminum Corp., known as Chalco, said April 16 it would cut 600,000 metric tons of production capacity as part of its plan to trim 1 million tons this year.
That includes the closure of 380,000 tons that was announced in June last year, Jiang Zhinan, a media official with Chalco, said by phone.
Chalco shares fell 1.4 percent to HK$2.90 in Hong Kong before the earnings announcement. The benchmark Hang Seng Index advanced 1.5 percent. The company’s Shanghai-traded shares rose 1.9 percent to 3.18 yuan today.
Chalco returned to an annual profit last year after it sold assets, including an aluminum fabrication business and a 65 percent stake in the Simandou iron ore project in Guinea, to its parent. Excluding one-time gains, mostly from the asset sales, Chalco made a loss last year, according to brokers including Credit Suisse Group AG.
Aluminum Corp. of China, Chalco’s parent, plans to return each of its business areas to profit next year and has the ability to withstand price fluctuations, it said in a Jan. 13 newsletter.
— With assistance by Helen Yuan