Chalco Earnings Fall Nearly 20%; Stock Drops

Aluminum Corporation of China, known as Chalco, closed at $14.33 per share in New York today, down $1.47.

CapitalWatch Staff
    Apr 23, 2018 4:11 PM  PT
Chalco Earnings Fall Nearly 20%; Stock Drops
author: CapitalWatch Staff   

Shares of Aluminum Corporation of China Ltd. (NYSE: ACH) fell nearly 10 percent today after the company announced that its first-quarter earnings dropped nearly 20 percent from a year ago due to lower aluminum prices.

Aluminum Corporation of China, also known as Chalco, closed at $14.29 per share in New York today, down $1.52. 


Headquartered in Beijing, China's biggest state-run aluminum producer, said in a filing to the Shanghai Stock Exchange that its revenue for the first quarter fell 10.5 percent to 36.7 billion yuan ($5.81 billion), while net profit during the January to March was 308.6 million yuan ($48.94 million), versus an adjusted net profit of 382.9 million yuan a year earlier.

The poor performance is caused by the drop of aluminum price and analysts are not optimistic about aluminum's outlook amid trade war fears. Shanghai aluminum price has collapsed from those September peaks and was trading below 14,000 yuan per ton a month earlier. 

Helen Lau, an analyst at Argonaut Securities in Hong Kong told Reuters that the Chalco numbers were in line with her expectations, of 1.3 billion yuan on an annual basis, but noted that without one-off gains totaling 282.25 million yuan, the company would only have made around 26 million yuan in profit.

In January, Chalco issued new shares to buy back stakes in four subsidiaries for about 12.7 billion yuan, only a month after selling them to a group of outside investors. As a result, Chalco recorded a 166.4 million fair-value gain on this quick sale.

Aluminum Corporation of China is the world's second-largest alumina producer and the largest aluminum producer in China.