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Chinese aluminium producer Chalco swings to heavy loss
Aluminum Corp of China (Chalco) posted a worse than expected net annual loss of 8.2 billion yuan ($1.3 billion), hit by low aluminium prices and rising costs.
China's top aluminium producer had warned of a full-year loss in January, but the 2012 loss announced on Wednesday was far deeper than the 4.78 billion yuan average forecast in a Thomson Reuters poll of analysts and compared with a net profit of 237.97 million yuan a year ago.
In a statement to the Hong Kong stock exchange, Chalco Chairman Xiong Weiping cited "an acute and complicated operational environment with a surplus in production capacity, slumping prices, declining ore quality and restrictions to the supply of imported bauxite".
In 2012 the average three-month aluminium futures price on the London Metal Exchange and Shanghai Futures Exchange fell 14.9 percent and 6.5 percent respectively, compared with 2011.
Chalco expects oversupply pressures to remain strong this year and said it is planning to accelerate cost cuts and measures to increase efficiency.
Last week, Chalco signed an preliminary agreement with Russia's United Company RUSAL to work together in areas including technological research, the development of bauxite resources and investment in integrated hydro-powered aluminium production.
For the fourth quarter, the company posted a net loss of 3.9 billion yuan, compared with net loss of 729.6 million yuan in the same period in 2011, according to Reuters calculations.
Chalco's Hong Kong-listed shares ended up 0.32 percent on Wednesday before the results were announced. They are down 11.8 percent so far this year, against a 0.85 percent loss on the broader Hang Seng index over the same period. ($1 = 6.2110 Chinese yuan) (Reporting by Wan Xu and Jonathan Standing; Editing by David Goodman)
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