Alumina cuts forecast 2007 earnings, again

ALUMINA has downgraded its expected underlying earnings for 2007 from $A490 million to $405 million, prompted by the strong Australian dollar, a lower aluminium price and higher costs.
Alumina cuts forecast 2007 earnings, again Alumina cuts forecast 2007 earnings, again Alumina cuts forecast 2007 earnings, again Alumina cuts forecast 2007 earnings, again Alumina cuts forecast 2007 earnings, again

MiningNews.Net

The downgrade comes after the Melbourne-based company announced in July that it had cut its expected full-year earnings from $569 million to $490 million.

In a statement today the company said a lower than expected aluminium price of $US1.21 per pound for 2007 had shaved $30 million off earnings.

A higher average USD-AUD exchange rate of 0.84 also had a detrimental impact on the company's earnings to the tune of $7 million, while the revaluation of Alcoa of Australia's US dollar receivables in Australian dollars from 0.85 at June 30, 2007 to 0.88 at December 31, 2007 had shaved a further $3 million off earnings.

Alumina also highlighted higher than expected production costs, principally freight and energy prices, and bauxite development and Hurricane Dean costs incurred at the Jamalco refinery had reduced the company's earnings by some $25 million and $14 million respectively.

The company said borrowing costs were $6 million higher than anticipated, due to higher interest rates.

Alumina said its underlying earnings are calculated as net profit after tax before the impact of non-cash accounting entries not related to the year's operating performance.

The company will announce its financial result for 2007 on January 31.

Investors have not welcomed today's news with Alumina's share price falling 16c to $6.15 in morning trade.