Alumina Reports 86% Drop in Profit

Submitted by Jim Thesiger on 6 August, 2009 - 20:17

An 86 percent first-half profit drop was reported by Alumina (AWC) after it went through very difficult six months in the aluminum market. However, the company claimed that some of its major markets are showing signs of recovery. The company reported a $6 million wroth of net profit for the half which is down from $43.8 million of the previous year. Alumina reported a loss worth of $15 million today compared with its $152 million earnings that the company saw last year.

The data is somewhat ahead of the forecast of the average analyst expectations where it was assumed that Alumina might face a loss of $19 million. Alumina stocks were one of the most effected mining stocks of the share market last year which simply dropped from highs above $5 per share in May last year to lows 80c in the month of March of the current year. Today the company stocks have seen a partial recovery gaining 8.9 percent during the morning trade session.

Company chief executive John Bevan stated that the company had to go through difficult times in the last six months where Alumina along with Alcoa the join venture partner of the company had to take decisive actions in order to cut output and cost. He also added that the company has left behind its worst time which was caused by the global recession and confident about a recovery. According to analysts, the profit was approximately around the line and no nasty surprise is expected. Aluminium price in average stayed below $US1400 a tonne for the half but the price went up passing the $US2000 mark overnight. Alcoa Worldwide Alumina and Chemicals (AWAC) reduced its alumina production as much as 12 percent on year. It is to be mentioned that Alumina owns 40 percent of the AWAC stake.