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20 JANUARY 2014 AL CIRCLE

Alumina Limited gets a 'Buy' Rating

1MINS READ
Investment house Deutsche Bank has rated Bauxite and aluminium investor Alumina Limited as a ‘Buy’, following the release of more than expected fourth quarter results, a report in Australian Financial Review says.

Alumina Limited owns a 40% share of Alcoa World Alumina & Chemicals (AWAC), the world’s largest alumina business and was formed in 1994 through a joint venture with Alcoa. The earnings release showed Alumina received US$107 million in dividends and also distributions from AWAC for the year 2013. No capital expense from Alumina was required for AWAC and at the end of 2013 Alumina’s net debt stood at US$135 million.

The market situation seems to be favorable for Alumina Limited since 2014 beginning, while the shares of other major mining houses like Rio Tinto Limited BHP Billiton Limited have fallen 2.2% and 0.7% respectively.

It is expected Alumina Limited would follow in the footsteps of BlueScope Steel Limited. In the last 12 months, Bluescope’s share price has risen to 61%, as the company’s fortunes have turned around through their cost-cutting measures aimed at returning profitability. In Alumina’s case, its fortunes hinge primarily on a more favorable commodity pricing.


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