ON APRIL 15, executives of the world's third-largest alumina producer, Aluminum Corp of China (Chalco), were happy to announce that the company had met the net profit promised to investors for last year at the time of its initial public offering.
Chalco recorded earnings of 1.58 billion yuan (about HK$1.48 billion), 2.3 per cent more than the minimum 1.55 billion yuan it forecast in the prospectus for its listing last December.
At first glance, Chalco's management has good reason to cheer.
Having registered a 37.1 per cent decline in net profit and a 9.1 per cent fall in turnover to 16.6 billion yuan compared with 2000, Chalco performed well compared to the global industry leaders in tough times.
The global economic downturn has seen aluminium consumption plunge almost 7 per cent in the West, the worst slump since a recession in 1981, according to Bear Stearns. The average London Metal Exchange aluminium price decreased by 7.8 per cent year on year to US$1,454 a tonne last year.
United States-based Alcoa, the world's No 1 aluminium company, reported a net profit plunge of 38.8 per cent last year to US$908 million (the equivalent of about 7.44 billion yuan), although sales dipped by a mere 0.3 per cent.
Alcan of Canada - the world's second largest aluminium producer - recorded a 99.1 per cent plunge to US$5 million, largely due to US$446 million in extraordinary charges covering asset write-downs, a plant closure and associated rationalisation costs.