Australian alumina producer Alumina Ltd (AWC) reported a 15% fall in full year net profit on Thursday, due to higher operating costs and impact of a stronger Australian dollar.
Underlying earnings are also down 29% to $406 million, and net profit after tax is $436 million.
"2007 earnings and cash generation declined from the record levels in 2006. 2007 was a year of substantial reinvestment to grow the AWAC joint venture through expansion projects in bauxite mining and alumina refining," chief executive officer John Marlay said.
"These are long term investments in a market in which worldwide growth in demand for aluminium is expected to continue at the strongest level for decades," he added.
A fully franked dividend of 12 cents per share was declared together with the introduction of a new Dividend Reinvestment Plan (new DRP). Under the new DRP shareholders may elect to have their dividends invested in new shares issued by the company, which will be issued at an undiscounted price relative to the market price during the pricing period.
"The introduction of the new DRP, and underwriting of the issue of shares in relation to the two dividend payments, recognised the substantial investment the company is currently making in new AWAC production capacity," the company said.
Alumina is part of joint venture interest in bauxite mining, alumina refining, alumina based chemicals and aluminium smelting via its 40 per cent interest in the series of operating entities of Alcoa World Alumina & Chemicals (AWAC).
The Victorian-based producer, listed on the ASX and NYSE, is positive on the outlook for 2008 as global demand for aluminium is forecast to grow strongly at approximately 10% through the year.
However, the company concedes general weakness of the US Dollar against currencies of the major countries in which AWAC operates will continue to generate pressure on US$ operating costs.
Shares in Alumina fell 26 cents to $5.24.
