The global economic recovery led to stronger demand for aluminium in 2010. This resulted in a 28 per cent increase in alumina prices, translating into better cash and profit generation for AWAC in 2010. As a result Alumina Limited posted a $34.6 million profit for 2010, compared with a net loss of $23.7 million in 2009. This financial result was tempered by the weak US dollar and the strong Australian dollar that impacted negatively on AWAC’s financial performance. AWAC’s revenue is principally derived from alumina sales.
Alumina’s net profit principally comprises a return on our equity investment in the AWAC joint venture. Other revenues are limited to small amounts of interest income and occasional one-off revenue associated with hedging activities. This revenue is itemised separately on Alumina’s profit and loss statement.
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| Alumina result area | 2010 | 2009 |
| Net profit ($US) | $34.6m | $(23.7m) |
| Dividend payments received from AWAC ($US) | $234m | $136m |
| Dividend payments to shareholders ($US) | $146.4m | $42.8m |
| Fully franked dividends ($US) | 6 cents/share | 1.8 cents/share |
| Wages and payments to suppliers ($US) | $14.7m | $10.5m |
| Gearing | 10% | 9% |
| AWAC result area | ||
| Profit ($US) | $335m | $106m |
| Alumina production (tonnes) | 15.2m | 13.5m |
| Aluminium production (tonnes) | 356,000* | 368,000 |
| Capital expenditure ($US) | $298m | $666m |
*Marginal decline due to a full year of curtailed production at Portland Smelter following 2009 production cuts
For the past five years Alumina Limited funded the strategically important Brazilian growth project, linking an efficient alumina refinery with a long-term bauxite deposit at Juruti.
Alumina Limited directly contributes economic value through dividends to shareholders as well as payments to employees, suppliers and service providers.
We distributed $146.4 million in dividend payments in 2010 to approximately 77,000 shareholders, an increase of 242 per cent from $42.8 million in 2009. This substantial growth in dividend payments was a direct outcome of the increased dividends received from AWAC.
During the year, Alumina Limited’s corporate costs were $14.7 million, including payments of $12.1 million to employees and suppliers.
In 2010 AWAC employed 7,294 people, contributing directly to the economy of the many communities and seven countries in which it operates. In the normal course of its operations, AWAC also supports regional economic growth through paying taxes and royalties. Local communities benefit from grants and financial assistance offered in community projects and infrastructure development.
Alumina Limited’s policy is to distribute cash from operations after debt servicing and corporate cost commitments have been met. In 2010, Alumina Limited paid out 81 per cent under this policy. In assessing the dividend payout, the Board also considers:
