Chinalco worst performer among state firms with 7.25b yuan loss

PUBLISHED : Tuesday, 24 August, 2010, 12:00am
UPDATED : Tuesday, 24 August, 2010, 12:00am
 

Chinalco, the parent of listed Aluminum Corp of China (Chalco), has been named the weakest-performing of 108 state-owned enterprises last year, although Chalco yesterday posted a profit for the first half of this year.

Chinalco recorded a loss of 7.25 billion yuan (HK$8.29 billion) last year, ranking it below Sichuan province-based steel-maker Pangang Group's 1.64 billion yuan loss and flat-screen television maker Irico Group's 1.87 billion yuan loss.

The figures were released yesterday by the State Council's State-owned Assets Supervision and Administration Commission (Sasac).

They were available only on 108 out of a total of 129 enterprises directly under the State Council's supervision.

Missing from the list are financial institutions, many of which are among the most profitable state-owned enterprises. They are under the administration of the China Banking Regulatory Commission and China Insurance Regulatory Commission.

The most profitable state-owned enterprises on Sasac's list were mainly monopoly or oligopoly industries such as telecommunications, oil and gas and electricity.

To enhance competitiveness, Sasac wants to reduce the number of enterprises under its supervision to fewer than 100 this year from 129 through mergers and acquisitions.

Chinalco's poor report card last year was largely reflected in Chalco's audited net loss of 4.64 billion yuan because of depressed aluminium prices amid oversupply. Chalco has the majority of Chinalco's aluminium-related assets.

Through acquisitions, Chinalco has amassed copper, rare earth and iron ore mining assets in the country and overseas, which will help it diversify away from the aluminium sector, which has suffered from years of oversupply.

Meanwhile, Chalco posted a first-half net profit of 530.6 million yuan, a marked turnaround from a loss of 3.52 billion yuan in the year-earlier period. The profit came after it made a 297.49 million yuan inventory write-down. Operating profit margin amounted to 6.83 per cent.

Turnover jumped 113.6 per cent to 59.78 billion yuan, thanks to a 39.1 per cent rise in the average selling price of alumina to 2,427 yuan a tonne and a 24.8 per cent rise in the selling price of aluminium to 13,575 yuan a tonne. Alumina is refined from bauxite and is smelted to make aluminium.

First-half alumina sales leapt 90 per cent to 3.19 million tonnes, as aluminium sales surged 46.3 per cent to 2.54 million tonnes.

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