WASHINGTON: Aluminum industry leader Alcoa announced a nearly $200 million loss for the fourth quarter on Friday, after saying it would slash its global smelting capacity by closing US and European plants.
Kicking off the US earnings season, Alcoa said it had lost a net $191 million in the last quarter of 2011, as revenue declined and cash was set aside for restructuring.
Facing lower metal prices and a stumbling European economy, Alcoa earlier Monday announced it would close high-cost plants in Italy and Spain.
Less than a week after announcing that it was shuttering facilities in Tennessee and Texas, Alcoa said its bid to reduce smelting capacity by 12 percent would also spell an end to some activities in Europe.
The company said a plant in Portovesme, Sardinia, would be closed permanently, while plants in Galicia and Aviles in Spain would be likely be closed temporarily.
The measures will take effect by the first half of 2012, and will come as a body blow in two countries that are laboring under high debt and weak economic growth.
Current employment at the three European plants is about 1,500 people, Alcoa said.
The US and European closures are part of a plan to reduce Alcoa's global smelting capacity of 4.5 million metric tons per year, in the hope of lowering costs and becoming more competitive.
The company's chief executive pointed to full-year profit that more than doubled, to $611 million, and a substantial chunk of cash on hand as evidence Alcoa is able to weather the storm.
"Alcoa turned in solid performance in a volatile year by responding quickly to changing market conditions and relentlessly managing cash," said CEO Klaus Kleinfeld.
"We stayed focused on growth and took aggressive action to cut costs, improve our competitiveness, and strengthen our balance sheet."
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