State-run Aluminum Corp of China Ltd released financial results for 2020 earlier this week, posting the lowest annual profit since 2016.
According to a filing by the firm, Chalco’s net income totaled CNY741 million last year, down by 13.1 percent on the year. Over CNY1.4 billion in impairment charges dropped the firm’s income to a low only surpassed recently by a profit of CNY368 million four years prior.
Chalco’s revenues fell to CNY186 billion, off by 2.2 percent from 2019. Although prices for aluminium bottomed out in Shanghai at the outset of the coronavirus pandemic, values ultimately rose by over 20 percent on the year on account of an even stronger late rebound. Chalco chalked up the fall in revenues to a corresponding fall in trade.
“Due to the impact of the COVID-19 pandemic and changes in the external environment in 2020, some customers […] have encountered difficulties in their production and operation,” explained the firm in the filing.
Ultimately Chalco gauged the impairments in 2020 to have cost the firm CNY1.23 billion. Last year’s impairments included CNY979 billion in bad debt from customers and CNY433 million due to a shuttering of 135 thousand metric tons per annum of capacity in northeast China.
Production fell in 2020 for the second straight year to 3.69 million metric tons, off by 2.6 percent on the year. Chalco trailed both China Hongqiao (5.62 million metric tons) and UC Rusal (3.76 million metric tons), but contributed to parent company Chinalco’s 2020 total of 6.1 million metric tons.
Meanwhile, Chalco’s alumina refining total rose by 5.3 percent to 14.53 million metric tons in 2020.