Chinalco Profit Rose Over Tenfold Last Year in Its Best Performance in a Decade
Wang Shifeng
/SOURCE : Yicai
Chinalco Profit Rose Over Tenfold Last Year in Its Best Performance in a Decade

(Yicai Global) Jan. 23 -- Aluminum Corp. of China (Chinalco) has delivered the best performance results in the last ten years, logging operating income of CNY310 billion (USD48.33 billion), up 17.5 percent per year, and an increase of over tenfold in total profit last year. Notably, it was reduced to joining the rank of enterprises suffering the heaviest losses in China three years ago.

Its total assets grew by 2.5 percent annually to reach CNY530 billion and its asset-liability ratio dropped by over 20 percent by the end of last year, below the average figure of central enterprises. In this way, Chinalco has outperformed the assessment targets set by the State-Owned Assets Administration Commission for three years in a row.

Aluminum Corp. of China Ltd. (Chalco) [SHA:601600; HK2600], a key subsidiary of Chinalco, posted a net profit of CNY1.36 billion in the first three quarters of last year, up almost tenfold annually. Such a marked growth in performance was mainly attributable to the rocketing gross margin of its main product driven by rising prices, as its earnings show.

Impacted by the declining price of its main electrolytic aluminum product, Chinalco has become one of the enterprises suffering the heaviest losses in China since 2008. Chalco shattered the loss record for A-share listed companies with net loss of CNY16 billion in 2014.

Given this situation, Chinalco has worked harder to achieve transformation and upgrading by shedding loss-making assets. The Chinese government also implemented supply-side structural reform to effectively consume the excess production capacity of electrolytic aluminum, leading to a substantial growth in the price of this product since this year.

US-based investment conglomerate The Capital Group Companies Inc. continued to increase its holdings of Chalco H-shares by 138 million, thereby taking 7.43 percent of company shares.

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Keywords: Aluminum Corporation of China , Profit Growth , Supply-Side Reform , The Capital Group Companies