Show Hide image

Alcoa expects higher demand for aluminium in 2013

The world’s third largest aluminium producer swings to profit.

The American aluminium producer Alcoa has posted a net profit of $242m (£151m) for the fourth-quarter of 2012, compared to a loss of $191m for the same period a year ago.

Revenue increased by 1 per cent to $5.99bn (2011: $5.83bn) beating expectations of industry analysts. The company’s shares grew by 1.4 per cent following the announcement of positive results.

The company expects global demand for aluminium to rise by 7 per cent in 2013, compared to a modest rise of 6 per cent in 2012 as it sees positive growth in building and construction, aerospace and commercial transport areas in the near future.

For the full-year of 2012, Alcoa’s underlying earnings declined by 67 per cent from 2011 to 24 cents per share on revenues of $23.7bn. Alcoa said that the decline in the aluminium price in 2012 cut about $1bn from revenues compared to 2011.

Alcoa CEO Klaus Kleinfeld said that the company “overcame volatile metal prices and global economic instability to deliver on our targets for the fourth year in a row”.

In 2012, the company reported an after-tax operating income of $358m and $612m respectively in its rolled and engineered products divisions. However, after-tax operating income declined by 36 per cent to $309m for primary aluminium, and by 85 per cent to $90m for alumina.

Over the next 10 years, Alcoa forecasts an average rise of 6.5 per cent in aluminium market.

Getty Images.
Show Hide image

Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.