Alcoa Suffers $497 Million Loss

Historic drop in aluminum prices

Alcoa said on April 7 it had posted its second consecutive quarterly loss as aluminum prices plunged amid a sharp global economic downturn. The higher than expected $497 million net loss in the first quarter compared with a net loss for the 2008 fourth quarter of $1.2 billion.

Klaus Kleinfeld, Alcoa's CEO, said the company's financial performance in the quarter was "adversely affected" by the economy-driven drop in demand and "historic drop" in aluminum prices.

Alcoa's revenuefor the first quarter slumped to $4.1 billion, down from $5.7 billion in the fourth quarter 2008. "The sharp drop in revenue resulted from the impact of the economic downturn on Alcoa's end markets -- automotive, transportation, building and construction and aerospace," the company said.

"As demand weakened during the quarter in those markets, realized metal prices fell an additional $558 a ton -- a 26% price decline -- resulting in prices that are now about 60% lower than last summer."

Kleinfeld said Alcoa was implementing a "holistic program that dramatically re-positions our balance sheet and operational cost structure."

"Besides putting us in a strong position to manage through this downturn, we now have the strategic and operational fundamentals in place for Alcoa to emerge even stronger when the economy recovers," he said.

Copyright Agence France-Presse, 2009

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