* World’s top aluminium producer reports 1.8 bln yuan profit
* Revenue decreases on lower aluminium production volumes
* Alumina sales up fivefold, account for 10.8 pct of revenue
By Tom Daly
BEIJING, Aug 24 (Reuters) - China Hongqiao Group, the world’s biggest aluminium producer, reported a 21 percent jump in first-half net profit despite lower revenues as it avoided a repeat of hefty impairments seen a year earlier.
Hongqiao, which only reports its earnings on a half-yearly basis, said net income totalled 1.8 billion yuan ($262 million) in the first six months of 2018, versus 1.49 billion yuan a year earlier, when it recorded a 3.36 billion yuan impairment due to the closure of illegal smelting capacity.
Revenues came in at 44.3 billion yuan, down 6 percent from the first half of 2017, according to a statement to the Hong Kong stock exchange.
Three-month Shanghai aluminium prices were on average 4.9 percent higher year-on-year, Hongqiao said citing figures from Chinese research house Antaike.
However, Hongqiao’s output of aluminium alloy products in the first half fell 20.2 percent year-on-year to 3.187 million tonnes after it was forced to close 2.68 million tonnes of smelting capacity in mid-2017.
Alumina accounted for 10.8 percent of revenues, versus just 2 percent a year earlier.
Sales of the substance used to make aluminium jumped almost fivefold from 970.9 million yuan in the first half of 2017 to 4.77 billion yuan as the company captured rising demand for alumina products, Hongqiao said.
China does not usually export much alumina but this year producers have taken advantage of a favourable arbitrage to international prices and have been selling overseas.
Smelters in northern Chinese cities, including Hongqiao’s base of Binzhou in Shandong province, will be subject to 30 percent production cuts this winter heating season starting in November, according to a draft plan from the Ministry of Ecology and Environment this month.
The measures are a repeat of those imposed last winter, which ultimately underwhelmed the market and sent aluminium prices tumbling, with plenty of supply still available. ($1 = 6.8740 Chinese yuan renminbi) (Reporting by Tom Daly; Editing by Susan Fenton)