AWC
Stock Code
Stock Exchange
A chief supplier of alumina, Alumina mainly operates in the mining of bauxite, refining of alumina and smelting of selected aluminium through AWC or Alcoa World Alumina and Chemicals for which it owns 40% of the company's shares. The 60% of the company's shares is owned by Alumina's partner, the Alcoa. Alumina Limited was listed on the Australia Stock Exchange on the 31st of October 1961. To date, around 10 people are employed in the company. Alumina is in charge of the two aluminum smelters as well as eight alumina refineries owned by Alcoa Alumina and Chemicals (AWAC).
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.
BlueScope Steel (BSL), a major investor in the steel industry that focuses in Europe, North America and Asia Pacific was the best performing stocks in ASX100 index for the 29th week that saw a rise of 15.7 percent or 38 cents in its stock price closing the week at $2.80.
WorleyParsons (WOR), a company that is engaged in the business of providing engineering project and design related services along with maintenance and reliability support services for diversified industrial segments was the worst performer in the ASX100 index losing 8.9 percent or $2.05 in its stock price and was closed for the week at $20.80.
Australian Resources Weekly provided by Australian market analyst UBS.
Impact of Apache explosion
Apache gas pipeline explosion event:
Alumina Limited (AWC) has a share price target of $6.70 from Australian stockmarket analyst Macquarie Research Equities.
Alumina Limited (AWC) announces US$300m convertible bond
Event: AWC announces US$300m convertible bond:
Among the best performing stocks for the week 7 of 2008 on the Australian sharemarket were a mixture of mining, oil & gas and real estate: Paladin Energy (PDN), Alumina (AWC), Woodside Petroleum (WPL), Australian Energy Development Oil (AED), Tishman Speyer (TSO). These best performing stocks for week 7 of 2008 managed gains above 11 percent by the end of the trading week. Energy services companies were dominating both the ASX 100 index and the ASX 200 index for the best performing stock list.
MFS was the overall worst performing stock this week taking on a 72 percent decrease in its share price. Among the worst performing stocks for the past week (week 3 for 2008) on the Australian sharemarket were a mixture of retail, funds management & financial services and mining companies: MFS (MFS), Centro Retail (CER), Centro Properties (CNP), Alumina (AWC), Zinifex (ZFX) and AED Oil (AED). These worst performing stocks for week 3 of 2008 recorded between 9 percent to 44 percent for their loss by the end of the trading week.
Alumina (AWC) has a Neutral 2 recommendation and a stock price target of $8.20 from Australian equities market analyst UBS. Rio Tinto today announced an all cash bid of US$101ps for Alcan, valuing Alcan at US$38.1bn. The implied multiple for this transaction based on consensus earnings is 16.3x (07e) and 16.7x (08e) earnings, pre-synergies (according to Rio) of US$600m after tax. Press articles over recent weeks have talked about a bid for Alcan by Rio Tinto and for Alcoa by BHP Billiton. With one leg of the double now underway, it is likely in their view that the market will focus on the probability of a bid for Alcoa and AWC by BHP Billiton., or perhaps a bid for AWC by Alcoa given it may be unsuccessful in its bid for Alcan. However, they believe the only logical owner for AWC is its joint-venture partner in AWAC, thus it may not attract as high a multiple. Based on consensus earnings of 49cps in 2008e and the Rio-Alcan multiple of 16.7x, we derive a value for AWC of $8.20ps. They have raised their price target to this as they expect the market may support the AWC price in the short term as a result of M&A in the sector and a renewed focus on alumina/aluminium. Their NPV is $6.74 based on a US90c/lb LT aluminium price. With the aluminium cost curve moving up, there may be upside to LT price, but we prefer BHP & RIO to AWC for their more attractive relative valuations.
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