MONTREAL, Canada (AP):
Alcan Inc. says its third-quarter profit soared to US$456 million from a year-earlier $81 million, with the aluminium producer's cash flow hitting a record US$803 million.
Net income for the quarter ended September 30 amounted to US$1.20 a share, compared with 21 cents per share a year ago, the Montreal-based company, which reports in U.S. dollars, said Tuesday.
On average, analysts had been forecasting earnings of US$1.23 a share, before one-time items, according to Thomson Financial.
Strongest third-quarter
"Operating cash flow reached an all-time high of US$803 million and we recorded the strongest third-quarter earnings performance in Alcan's history," CEO Dick Evans.
Evans said there is still a high demand worldwide for aluminium and a supply deficit of about 300,000 tons this year.
For 2007, there could be either a surplus or a slight deficit in supply he said in an interview before a conference call to discuss the third-quarter results.
The price of aluminium has recently strengthened again and is back up at the highest level it reached last spring, at more than $2,800 a tonne, Evans said.
The demand is mostly from China.
"To put it in perspective, China is now the largest consumer of aluminum in the world. China's growth and consumption today is about 10 times the growth on an average basis than the U.S.
"The new growth is really coming from China and some of the other developing economies," he said, adding those economies would include India, the Middle East and Eastern Europe.
Aluminium market fundamentals
With aluminium market fundamentals expected to remain firm and normal seasonal patterns in cash flow, "We expect fourth-quarter cash from operations to be even stronger," Evans said.
Concerning Alcan's expansion plans, the project to modernise a smelter in Kitimat, British Columbia, is expected to go ahead but needs environmental approval a longer labour contract and an agreement with B.C. Hydro, Evans said.
Alcan also expects its participation in the Coega aluminium smelter in South Africa to go ahead and "We still feel we are very near an agreement on a long-term power supply," Evans said.
