Alain Belda, chairman and CEO of Alcoa Inc. The aluminium company grew profits by 14 per cent in 2007, set new sales record. - File

Alcoa set an all-time record for revenues in 2007, according to chairman and chief executive officer Alain Belda, which grew to US$30.75 billion at year end, December 31, from US$30.38 billion.

Income from continuing operations and cash generation also reached record levels, Belda said on Wednesday.

Profit increased 14 per cent to US$2.56 billion, from US$2.25 billion in 2006.

"We battled substantially higher material input and energy costs and currency impacts while, simultaneously, continuing to execute on the largest capital investment programme in our history," Belda said, in a written statement.

Investments

Alcoa invested in new plants, expanded production at others, modernised operations, renegotiated long-term power agreements and built new energy facilities to ensure access to power at competitive rates during the year, he said.

The company, which knocked from the top slot to third largest aluminium company, also continued to invest in growth markets such as Brazil, China and Russia, Belda said.

In Jamaica, the company wrapped up a US$120 million project that boosted capacity at the Jamalco alumina refinery by 150,000 tonnes to 1.425 million tonnes. The investment gives Alcoa an additional five per cent equity in Jamalco, while Jamaica retains 45 per cent.

Alcoa's earnings soared in the fourth quarter by 76 per cent, buoyed by the pending sale of its packaging and consumer businesses.

Net income rose to US$632 million, or 75 cents per share, for the three months ended December 31, from US$359 million, or 41 cents per share, during the same period a year earlier.

Earnings

The earnings included a favourable restructuring adjustment and tax benefit totaling US$323 million, or 38 cents per share, mostly stemming from the company's recent agreement to sell the packaging and consumer businesses.

Quarterly revenue fell to US$7.39 billion from US$7.84 billion last year, due to lower metal prices and the exclusion of results from a soft alloy extrusion business that is now part of a joint venture.

Its alumina business was the biggest money spinner in the fourth period, recording after-tax operating income of US$205 million, a decrease of US$10 million, or five per cent, from the third quarter.

"System production increased by a net of 80 kmt as Suralco, San Ciprian and Pinjarra set quarterly production records and Jamalco continued its recovery from Hurricane Dean," said Alcoa.

"However, higher freight and energy costs and unfavourable currency offset production gains."

Still, the overall results easily beat Wall Street expectations. Analysts, surveyed by Thomson Financial, on average, were looking for earnings of 33 cents per share on US$6.92 billion in revenue.

Those forecasts, typically, exclude one-time items.

In December, Alcoa said it was selling its packaging and consumer businesses for US$2.7 billion cash to Rank Group Limited, a private New Zealand company.

The deal, which includes the Reynolds Wrap foil brand, is expected to close early this year.

AP and Gleaner reports