) announced that it plans to permanently close its Fusina primary
aluminum smelter in Italy. The announcement was made to reduce
costs as well as to improve its competitiveness. Alcoa had
already curtailed activities at the facility in Jun 2010.
The planned closure of the facility will reduce Alcoa's global
smelting capacity of 4.2 million metric tons per year by 44,000
metric tons. The move is in addition to a bigger restructuring
plan announced by Alcoa last month.
In May, Alcoa announced the possibility of a cutback in
aluminum production. The company stated that it will review
460,000 metric tons of smelting capacity over the next 15 months
for potential curtailment. These initiatives by the company are
aimed at maintaining competitiveness in the market as aluminum
prices declined by more than 33% from their peak levels in
Alcoa stated that it will work with the affected communities
to explore ways to redevelop the Fusina smelter and has also
promised to consult local unions on how to help the laid-off
employees. The facility employs only 14 people.
As a result of the closure, Alcoa expects to incur total
restructuring-related charges for 2013-second quarter in the
range of $30 million and $35 million after-tax, or about 3 cents
per share, of which approximately 50% is non-cash.
Alcoa, which is among the prominent players in the mining
industry along with
Aluminum Corporation of China Limited
Atlatsa Resources Corporation
BHP Billiton Limited
), is a world leader with respect to production and management of
primary aluminum, fabricated aluminum, and alumina as well as the
world's largest miner of bauxite and refiner of alumina. Alcoa
currently retains a short-term Zacks Rank #4 (Sell).
Alcoa released its first quarter 2013 results in Apr. The
company's profit surged roughly 59% in the quarter, buoyed by
strong aluminum demand. It posted a profit of $149 million or 13
cents per share in the quarter, exceeding the profit of $94
million or 9 cents recorded a year ago. The results were driven
by strong demand across the aerospace and auto markets.
Excluding one-time special items, Alcoa earned $121 million or
11 cents a share in the quarter, beating the Zacks Consensus
Estimate by a penny and exceeding $105 million or 10 cents per
share posted in the year-ago quarter.
Revenues declined roughly 3% to $5,833 million from $6,006
million in the year-ago quarter and were below the Zacks
Consensus Estimate of $5,857 million. Sales were hurt by lower
aluminum prices and reduced production in Alcoa's primary metals
business in Europe.
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