Alcan earnings tumble in 1990

Fourth-quarter net income picked up for Alcan Aluminum (TSE) but the Montreal-based aluminum producer saw its overall earnings dip in 1990 to US$543 million from US$835 million for the previous year on comparable sales and operating revenues. Earnings during the fourth quarter rose to US$190 million from US$142 million for the same period in 1989.

Chairman and chief executive officer David Morton said that while the lower earnings “reflect the impact of weak business conditions and lower prices, they also highlight the need for continued emphasis on cost reduction programs throughout the organization. Such programs are in place and will reduce 1991 costs by over US$200 million.”

Morton said the near-term outlook is not encouraging. However, he said inventory levels are low, which should benefit a recovery as demand picks up. He is optimistic about longer-term growth prospects, particularly in the automotive and packing sectors.

Alcan’s return on average common shareholders’ equity last year was 10.9% compared with 18.7% in 1989.

Sales prices of ingot products dropped by about 4% during the fourth quarter compared with 1989, the company said. For all of 1990, prices averaged US$1,679 per tonne, down about US$400 from the previous year.006 Alcan Aluminum (TSE)* 3 months ended Dec. 31 1990 1989 Revenue $2,286 $2,138 Net earnings 190 142

per share 0.83 0.60 12 months ended Dec. 31 1990 1989 Revenue $8,919 $9,047 Net earnings 543 835

per share 2.33 3.58004

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