Australia's Alumina Limited rebounds to $34.6 mil profit in 2010

Australia-listed Alumina Limited on Thursday posted a net profit of $34.6 million for 2010, rebounding from a loss of $23.7 million a year earlier, and said the market outlook for alumina and aluminum "continues to improve."

Underlying earnings after tax totaled $36.7 million, compared with $300,000 in 2009, the company said in a statement. It reports in US dollars.

Alumina Limited is a 40% stakeholder in the Alcoa World Alumina and Chemicals or AWAC joint venture with Alcoa （60%）, which produces around 17% of the world's alumina and is a major supplier to independent smelters.

AWAC generated free cash flow of $416 million in 2010, an improvement of $1.1 billion from minus $729 million in 2009, Alumina Limited said Thursday. Free cash flow is cash from operations less capital expenditure.

The AWAC results were impacted by costs of $135 million before tax from ramp-up woes at the Alumar alumina refinery in Brazil, Alumina Limited said. The 3.5 million mt/year refinery was hit by power outages and equipment commissioning issues in 2010 but is now running at design capacity, the company said.

Alumar is jointly owned by AWAC （54%）, BHP Billiton （36%） and Rio Tinto Alcan （10%）, with Alcoa as operator.

AWAC's profit was also reduced by the strengthening of the Australian dollar, as the country accounts for 60% of AWAC's global production, Alumina Limited said.

AWAC dividends received by Alumina Limited totaled $234 million in 2010, compared with $136 million a year earlier, the latter said.

"With the major investment in Brazil behind us and the outlook for alumina pricing continuing to strengthen, dividend flow from the joint venture has also significantly improved," Alumina Limited CEO John Bevan said in a statement.

"The global alumina market is entering a growth phase due in part to the rising demand for alumina from independent, non-integrated smelters, including many in China.

"Global demand for alumina is forecast to increase 12% in 2011 and global supply and demand is expected to be in balance."

（Source From ：Platts）