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China Hongqiao cuts FY'19 aluminum output guidance on typhoon; H1 profit jumps

Aluminum giant China Hongqiao Group Ltd. reported a 37.3% year-over-year jump in net profit to 2.48 billion Chinese yuan for the first half, with the prior-year results including a loss of 648.8 million yuan on disposals of subsidiaries.

As a result of a recent typhoon, some of the company's workshops were damaged by rain, with preliminary estimates indicating a hit to 2019 output of 200,000 to 300,000 tonnes.

Revenue fell 6.5% to 41.43 billion yuan due to lower sales volumes and prices amid lower demand as economic growth around the globe slowed. The company also felt the impact of the U.S.-China trade war.

Aluminum alloy product sales volumes fell 13.9% to 2.53 million tonnes amid government-mandated cuts for the heating season as well as capacity upgrades, which led to a 10.3% decrease in output of aluminum alloy products to about 2.86 million tonnes.

Sales for aluminum fabrication products rose 35.3% to about 314,000 tonnes as output of aluminum fabrication products jumped 66.9% to 389,000 tonnes since the group actively expanded in-depth processing market, which caused an increase of purchase orders.

The company said Aug. 23 that alumina products sales increased 32.2% on a yearly basis to about 2.4 million tonnes, mainly due to a decrease in self consumption and development of the domestic product market.

As of Aug. 22, US$1 was equivalent to 7.08 Chinese yuan.