Aluminum Corp of China rings up biggest ever loss in 2014
Aluminum Corp of China Ltd (Chalco), the leading producer of primary aluminium and raw material alumina in the country, posted its largest-ever loss in 2014 due to huge writedowns and weak metal prices as the Chinese economy slowed.
Chalco swung to a net loss of 16.2 billion yuan (US$2.61 billion) for the year in 2014 from a profit of 948 million yuan the previous year, the company said in a filing on the Shanghai stock exchange on Wednesday.
Chalco, which sells its products mainly in China, the world’s top consumer and producer of aluminium, made provisions for 7.5 billion yuan for some long-term assets and lower aluminium prices.
Prices of the most-active aluminium contract on the Shanghai Futures Exchange dropped 6.7 per cent in 2014, weighed by overcapacity in the sector.
Aluminium prices on the London Metal Exchange rose 3 per cent last year.
China’s monthly production of primary aluminium repeatedly hit record levels in the second half of 2014 due to new capacity. The industry will continue to face overcapacity in 2015 as little of the existing 35 million tonnes of capacity can be phased out, the Chinese industry ministry said last month.
Chalco also experienced senior management changes in 2014. Xiong Weiping resigned as chairman and executive director in December. Vice Chairman Sun Zhaoxue resigned in September after the government launched an investigation into him.
Chalco’s results came after Hong Kong and China markets closed. On Wednesday, its Hong Kong shares closed down 1.1 per cent, lagging the main Hang Seng Index’s performance.
In Shanghai it dropped 3.2 per cent, underperforming the composite index’s 0.8 percent fall.