Chalco earnings down 13.5% in 2007
Updated: 2008-03-18 07:13
(HK Edition)
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Aluminum Corp of China Ltd, the world's No 4 aluminium producer, posted annual earnings below expectations after it failed to offset weakening prices and high production costs by ramping up output, and faces a tough 2008 with global supply ample.
The acquisitive firm known also as Chalco, the country's top alumina and aluminium maker, said mergers and acquisitions in the international mining industry have resulted in increasingly fierce competition in the global market.
Chalco posted net profits of 10.25 billion yuan in 2007, down 13.5 percent from a restated profit of 11.84 billion yuan in 2006, it said in a statement.
That came in below a consensus forecast of 11.27 billion yuan from 19 analysts polled by Reuters Estimates.
"Its revenue rose 17.5 percent last year but costs increased by 30 percent, resulting in significant margin eroson. And that's worse than the market expected," said Geoffrey Cheng, an analyst at Daiwa Institute of Research.
Chalco leapt into the spotlight this year after its State-owned parent, Aluminum Corp of China, and US aluminium maker Alcoa paid $14 billion for a 12 percent stake in Rio Tinto's London-traded shares.
Reuters
(HK Edition 03/18/2008 page2)