Alcoa Us Incurs A Final-quarter Loss
Sydney Morning Herald
Monday January 21, 1991
A sharp downturn in the profitability of the aluminium industry has been indicated by the largest aluminium producer in the US, Aluminum Co of America(Alcoa).
The US group reported that it had become a loss-maker in the final quarter of last year.
The $US140.4 million ($179.3 million) fourth-quarter loss by the North American company, announced on Friday, precedes the expected announcement today of a sharp downturn in earnings by its Australian offshoot, Alcoa of Australia Ltd.
The Australian company, 51 per cent owned by Alcoa of the US and 48.1 per cent by Western Mining Corporation Ltd, already has indicated that its run of super growth over the past three years has ended.
The company is expected to announce a profit close to 1989's after-tax record earnings of $743 million, making it one of the best performers in the Alcoa group, but with little hope of any further growth in earnings in the immediate future because of the poor state of the Australian economy.
The US parent's red ink for the final quarter was due to a variety of factors, including a $US90 million charge for cleaning up environmental problems at its US plants and a $US142 million write-down in the value of unspecified non-aluminium businesses.
It reduced full year net earnings to $US295.2 million from the previous year's record $US944.9 million profit.
But it was sharply lower aluminium prices that stung the company most.
The US parent said that aluminum prices averaged about 16 per cent less in 1990 than a year earlier.
The decline in earnings was accentuated by the results of Brazilian operations, which plunged because of actions by the government there to curb inflation.
Earnings from Brazil dropped to less than $US1 million in 1990 from $US104 million in 1989.
© 1991 Sydney Morning Herald
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