Chalco Swings to Profit as Sales Surges Amid Price Rebound
(Bloomberg) -- Aluminum Corp. of China Ltd., the country’s second-largest producer, said it swung to a profit in the third quarter as sales surged to the highest in more than two years amid a price rebound. Shares rose in Shanghai.
The company known as Chalco had net income of 50.1 million yuan ($7.4 million) in the three months through September, compared with a restated net loss of 972 million yuan a year earlier, according to a statement. Sales rose to 42 billion yuan, the highest since 2014.
Aluminum has climbed 16 percent in Shanghai this year along with a broader commodity rally, as a credit-fueled binge boosted property and infrastructure spending. The company has also been cutting costs after domestic metal prices slumped to a record late last year.
Chalco may need to reduce output costs further as China’s expanding aluminum capacity curbs prices for the rest of the year, Zhu Yi, an analyst with Bloomberg Intelligence, said in a report earlier this month. Idled facilities are restarting and new plants are coming online as smelters benefit from higher margins, sending output in the world’s top producer to a 15-month high in September.
The company’s shares have risen 12 percent in Hong Kong this year, outperforming a 6.7 percent gain in the benchmark Hang Seng Index. The stock was suspended on Friday morning after the market was closed as Typhoon Haima approaches. It ended at HK$2.89 on Thursday, down 1 percent, before the earnings release. In Shanghai, the stock gained 1.3 percent.
With assistance from Winnie Zhu