SINGAPORE, March 23 (Reuters) - Aluminum Corporation of China Ltd’s (Chalco) net profit more than doubled in 2016, marking a second straight year of profitability thanks to recovering non-ferrous metal prices and cuts in production costs.
The state-owned aluminium producer, one of the biggest in the world, made a net profit of 402.5 million yuan ($58.5 million) in 2016, up from a revised 148.6 million yuan a year earlier, it said in a filing to the Shanghai stock exchange.
“The increase in profit was mainly due to power reforms and stronger operations, which helped lower production costs of alumina and electrolytic aluminium products by about 12 percent and 17 percent respectively,” Chalco said on Thursday.
Alumina is the key raw material for producing aluminium.
In 2016, aluminium prices rose by more than 10 percent, with gains continuing so far this year due to global capacity cuts and infrastructure projects in China, the world’s top producer and consumer of the metal.
Earlier this year, Yunnan Aluminium Co Ltd said it expected its 2016 net profit to rise about 315 percent, while Shandong Nanshan Aluminium Co Ltd forecast a rise of about 217 percent for the same period.
As the overall market improves, Chalco said on Thursday it planned to invest up to 700 million yuan in a light alloy joint venture project with a total investment of 3.9 billion yuan in Guizhou province.
Chalco’s announcement came after Hong Kong and China’s markets closed on Thursday. Its Hong Kong shares ended 1.3 percent higher while its Shanghai stock closed 1.04 percent up, outpacing the broader markets.
$1 = 6.8845 Chinese yuan renminbi Reporting by Lee Chyen Yee in Singapore and Meg Shen in Hong Kong; Editing by Mark Potter