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Hongqiao Bottom Line Saved By Surge In Alumina Sales In 2018

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Hongqiao Bottom Line Saved By Surge In Alumina Sales In 2018

Twice the volume of alumina sales in 2018’s latter half helped offset a drop in aluminium production and prices, balancing out China Hongqiao Group’s net profit in the period.


In a filing released late last week, Hongqiao reported a full-year net income of CNY5.41 billion (US$805.97 million), off by 0.9 percent on the year. The full year’s profit rose by 5.4 percent, overcoming a drop in revenues for the year.


Last year’s bottom line fared better last year than the year before, as Hongqiao labored under a spike in impairment charges connected to the closure of 2.68 million metric tons per annum of illicit aluminium smelting capacity. Per the firm, the closures “led to a corresponding increase in alumina available for sale,” permitting the firm to capitalize upon global alumina shortages until they returned to normal in the closing quarter.


Hongqiao increased alumina sales by 117.9 percent on the year to 4.09 million metric tons last year according to their filing, with sales of the aluminium precursor rising from 4.7 percent of total sales in 2017 to 12.2 percent last year. As mainland refineries added no new capacity in 2018, Hongqiao said its Indonesian refinery witnessed “booming production (and) further improved the net profit” over the course of last year.


Thanks to the significant rise in alumina sales, the bottom-line impact from other negative factors was largely blunted, leaving the year’s revenues off by only 7.9 percent on the year. Last year saw Hongqiao’s aluminium business endure an 18-percent fall to 5.865 million metric tons.


Prices at the Shanghai exchange drop by 13.9 percent in 2018, largely the victim of tepid demand for the metal which is, in turn, a casualty of the ongoing trade difficulties between the Middle Kingdom and the United States.

“The group expects that the aluminum industry in China will continue to face various challenges brought by the uncertainties in the global trade market in the short term,” opined the firm in closing.



Pub Time : 2019-03-25 19:52:39 >> News list
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