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Alcoa JV drives Alumina's profit growth

Christian Edwards  |  24 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Miner and metals producer Alumina (ASX: AWC) has lifted its first-half profit to $US136.6 million ($A172.7 million), thanks to higher prices realised by its joint venture with metals giant Alcoa.

Alcoa World Alumina and Chemicals (AWAC) made a $US369.7 million net profit in the six months to June, up from $US72.2 million in the prior corresponding period.

Alumina's 40 per cent stake in the venture yielded the ASX-listed firm a profit of $US147.1 million ($A186.2 million).

Shares in the investor in global bauxite mining and alumina refining were up 10.5 cents, or 5.2 per cent, at $A2.135 at 1530 AEST.

Since June 30 this year, the company has received $US83.6 million in distributions from AWAC, which the company said it has directed into its fully franked interim dividend of 4.2 US cents per share.

"Higher net cash distributions from AWAC have enabled the company to increase its dividend to shareholders," Alumina chief executive Mike Ferraro said on Thursday.

The company suspended its dividend reinvestment plan and increased its interim dividend from 2.9 US cents a year ago.

Higher alumina prices helped lift AWAC's earnings before interest, tax, depreciation, and amortisation to $US682.4 million.

Alumina said it now expects global aluminium demand--which has grown over 5 per cent so far this year--to continue, driven largely by China.

"Global aluminium consumption is growing and underpins demand for alumina and bauxite," Mr Ferraro said.

The company's full-year production forecast remains at 12.6 million tonnes, although the average cost of production will increase by $US9 to $US202 a tonne.

Bauxite demand and prices are likely to remain well supplied and steady, although exposure to possible Chinese environmental reforms--like winter pollution restrictions--could create near-term price fluctuations, Mr Ferraro said.

AWAC DRIVES ALUMINA'S PROFIT LEAP

* Half year net profit $US136.6m v $US7.8m

* Interim dividend up 1.3 US cents to 4.2 US cents

 

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