Chalco's 2019 net profit edges up despite lower aluminium output, weak final quarter
BEIJING, March 26 (Reuters) - Aluminum Corp of China Ltd 601600.SS, 2600.HK, known as Chalco, said on Thursday net income rose 2.4% year-on-year in 2019 thanks to higher trading volumes, even as production fell and the company barely eked out a profit in the fourth quarter.
Chalco, China's biggest state-run aluminium producer, posted net income of at 851 million yuan ($120.2 million) for the full year, versus an adjusted figure of 831.2 million for 2018, according to a filing to the Shanghai Stock Exchange.
Chalco previously reported net profit of 870.2 million yuan for 2018.
Fourth-quarter profit came in at 42.6 million yuan, which was down from 102.6 million yuan in the third quarter and - barring a quarterly net loss a year earlier - marked Chalco's worst result since the first quarter of 2016, according to Refinitiv Eikon data.
Chinese aluminium producers are bracing for a difficult 2020 after Shanghai aluminium prices SAFc1 touched a more than four-year low of 11,340 yuan a tonne this week, as ample supply overwhelms coronavirus-hit demand for the metal and investors sell off commodities across the board.
Analysts say sub 12,000 yuan aluminium is well below most smelters' break-even price and has seen some firms - including Chalco - shut production units for maintenance.
Chalco's annual revenue came in at 190.07 billion yuan, up 5.5% year-on-year despite an 8.8% drop in the primary aluminium segment and a 0.6% fall in sales of alumina, the substance used to make aluminium.
"The company's market influence has increased, and a rise in the trade volume of electrolytic aluminium and alumina products has led to higher revenue," Chalco said.
It did not provide detailed operational data in its release but said output and sales of primary aluminium fell year-on-year due to a decision to suspend some production.
The company said in January 2019 it would shutter a 200,000 tonne per year smelter in Shandong province and consider upgrading it.
($1 = 7.0790 Chinese yuan renminbi)
(Reporting by Tom Daly; Editing by Elaine Hardcastle)
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