Alcoa associate, Alumina, has reported a net loss for 2009, missing market expectations for a profit, thanks to a deeper impact from the global slump in aluminium demand last year.
But despite that red ink, the company reinstated its dividend because it believes the outlook is improving.
Alumina will pay 2c a share, not much, but better than the lack of any payout in 2008.
Alumina was forced to scrap its dividend a year ago and conserve cash as the industry was dragged down by the global recession and credit crunch.
But recovery seems to be underway with demand rising thanks to China and restocking in the developed economies.
Alumina said it now expects higher dividends this year.
Despite this good news, Alumina shares fell, dropping 6.5c in early trading before easing back to end down 1.5c at $1.585.
The net loss of $26 million follows Alumina’s $168 million net profit in 2008 during the commodities boom (which faded in the closing months of that year).
Underlying losses after tax for 2009 were $2 million, compared to an underlying profit of $202 million the previous year.
Alumina chief John Bevan said in a statement the outlook for improved returns for shareholders has strengthened.
"The 2009 result reflects the worst of the impact of the global financial crisis on aluminium and alumina prices," Mr Bevan said.
"The AWAC global bauxite and alumina business remained profitable throughout the downturn and the smelters returned to profitability in the final quarter."
"LME aluminium prices are approximately 55 per cent higher than they were at the beginning of 2009 although they remain well below 2008 averages.
"AWAC alumina production is forecast to increase by around two million tonnes in 2010 to meet customer demand, and average production costs are targeted to remain at the improved 2009 levels.
"In addition, the major capital expenditure program in Brazil is now largely behind us.
”These factors create an environment for Alumina Limited to expect to receive an improved dividend flow from AWAC in 2010."
Alumina is the 40% partner of the Alcoa World Alumina & Chemicals (AWAC) group, an international network of alumina refineries, bauxite mines and chemical plants.
The US-based Alcoa is the operator of AWAC with a 60% holding.
Alumina production during 2009 dipped to 13.5 million tonnes, compared to 14.4 million tonnes the previous year.
Mr Bevan said production capacity was increased 15% during the year due to the commissioning of the expanded Brazilian operations and the acquisition of the remaining 45% in the Suralco refinery, in Suriname.
The company said that at December 31 it had total cash and cash equivalents of $340.6 million, up from $66.8 million a year earlier.
