Alumina Profit Drops 86% on Demand, Price Declines

MELBOURNE, Aug. 6 -- Alumina Ltd., partner in the world's biggest producer of the material used to make aluminum, said first-half profit slumped 86 percent because of a decline in prices and demand.

    Net income was A$6 million ($5.1 million), or 0.3 cents a share, in the six months ended June 30, from A$43.8 million, or 3.1 cents, a year ago, the Melbourne-based company said today in a statement.

    Alcoa Inc., Alumina's partner and the largest U.S. aluminum producer, posted its third consecutive quarterly loss in July as lower demand from automakers and the construction industry kept the metal at about half year's prices. The outlook for the global aluminum market remains "uncertain" and depends on a recovery first in China, Alumina said today in the statement.

    "The result covers the most uncertain period of the market downturn," Alumina said. A decline in the price of aluminum during the period "had a major impact on margins," it said.

    Alumina rose 5.5 percent to A$1.725 at 10:04 a.m. Sydney time on the Australian stock exchange. Alumina owns 40 percent of the Alcoa World Alumina & Chemical venture and Alcoa owns the balance. The venture produces one quarter of the world's alumina, which is refined into aluminum.

    It today reported an underlying loss of A$15 million, from profit of A$152 million a year ago.

    (Source: Bloomberg)