Aluminum producer Alcoa, Pittsburgh, has reported that it continued to lose money in the fourth quarter of 2009, although its losses were smaller than in the same quarter of 2008.
Alcoa reported a net loss of $277 million in the final quarter of 2009 compared with a loss of nearly $1.2 billion during the same quarter in 2008.
For the full year 2009, the company’s revenue was $18.4 billion, compared to $26.9 billion in 2008. Alcoa recorded a loss of $985 million in 2009 compared with income of $229 million in 2008.
“This was a tough year for the aluminum industry – a price crash, demand destruction, and credit crunch,” says Klaus Kleinfeld, Alcoa’s president and CEO. Kleinfeld states that the company has taken measures designed to yield better results in 2010. “We reshaped our cost structure and portfolio for profitable growth and we built the cash reserves to weather current economic uncertainties and invest in opportunities for future growth. Alcoa will benefit from those achievements for many years to come.”
As part of a “Cash Sustainability Program,” the company reduced its capital expenditures in 2009. Capital expenditures were $363 million in the fourth quarter of 2009 and $1.6 billion for the year, a more than 50 percent reduction from 2008.
“Despite the capital expenditure reductions, the company completed a number of important projects that will have a major impact on future growth and profitability,” the company says in the news release accompanying its earnings report. “Key growth investments in 2009 include the Juruti bauxite mine and Sao Luis refinery expansion in Brazil; new lithographic sheet operations in Bohai, China; and a new end and tab line in Russia. In 2009, Alcoa also secured long-term power agreements on approximately 2 million metric tons of its smelting operations in Quebec; Spain; Massena, N.Y.; and Ferndale, Wash.”