Rise in cost sees net loss for Chalco
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Aluminum?Corp of China Ltd, the nation's largest producer of the lightweight metal, lost money in the third quarter as production costs rose on higher prices for raw materials and power.
But the company, better known as Chalco, expects to record a profit for the whole year as it says sales and profitability of its main products are gradually picking up.
Chalco posted a net loss of 117.8 million yuan (US$17.7 million) in between July and September, reversing from a 21.3 million yuan profit a year earlier, according to earnings results released late Monday. It lost 96 million yuan in the second quarter.
In August, Chief Financial Officer Chen Jihua said Chalco posted a net loss of about 500 million yuan in June, but the loss had substantially narrowed in July.
For the first nine months, Chalco posted a net profit of 412.8 million yuan, against a net loss of 3.5 billion yuan a year earlier.
The government raised power surcharges for some aluminum smelters by as much as 100 percent from June to curb overcapacity in the energy-intensive industry.
Governments in Guizhou and Henan provinces as well as in Guangxi Zhuang Autonomous Region have also started to control aluminum output by rationing power supply in order to meet energy-saving targets.
But analysts said government curbs on aluminum production will support prices in coming months, which could help lift Chalco's earnings in the current quarter. To date about 6 percent of the nation's aluminum production capacity has been closed, according to China International Capital Corp.
