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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.