Nanshan’s alumina sales rise 15%, but profit drops 74.8%

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Nanshan Aluminium International sold 15 per cent more alumina in the first half of 2026, but a 39.5 per cent fall in its average selling price drove profit down nearly 75 per cent, showing how quickly a commodity-price downturn can outweigh rising sales volumes.

The Hong Kong-listed producer reported revenue of USD 415.0 million for the six months ended June 30, down 30.5 per cent year on year, while profit attributable to shareholders fell 74.8 per cent to USD62.7 million. The company cut its interim dividend but retained a stronger balance sheet and continued work on an Indonesian electrolytic aluminium project.

More tonnes, less revenue

Nanshan sold about 1.296 million tonnes of alumina during the period, up 15.0 per cent from approximately 1.127 million tonnes a year earlier. Yet its average selling price fell to USD320 per tonne from USD529 per tonne in the first half of 2025.

That 39.5 per cent price decline more than offset the increase in volumes. Revenue fell to USD 415.0 million from USD 596.8 million, while gross profit dropped to USD 65.5 million from USD 303.9 million.

Gross margin narrowed sharply to 15.8 per cent from 50.9 per cent, as lower selling prices were not matched by an equivalent reduction in per-tonne costs. The figures demonstrate the company’s exposure to international alumina pricing: higher output can improve physical sales, but it cannot protect earnings when realised prices fall substantially.

Nanshan said the average international alumina price, based on LME Platts data, declined to around USD 307 per tonne during the period, compared with approximately USD 447 per tonne a year earlier.

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Price slump hits payouts

The profit decline flowed through to shareholder returns. Nanshan declared an interim dividend of HKD 0.16 (USD 0.020) per share, down from HKD 0.65 (USD 0.083) per share in the first half of 2025.

Basic earnings per share dropped to USD 0.10 from USD 0.46.

“Despite the complex market environment,” Nanshan stated its metallurgical-grade alumina business maintained stable operations in Southeast Asia.

Higher other income provided limited support. Other net income rose to USD 23.1 million from USD 8.2 million, mainly because of net foreign-exchange gains, while finance costs were only USD 1,000. However, those gains were insufficient to offset the drop in gross profit caused by lower alumina prices.

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Cash supports aluminium expansion

The results also show that Nanshan entered the price downturn with significant financial capacity. Its total assets rose 11.0 per cent to USD 2.496 billion at June 30 from USD 2.249 billion at the end of 2025. Equity attributable to shareholders increased 10.2 per cent to USD 2.054 billion.

Cash and cash equivalents more than doubled to USD 666.7 million from USD 321.3 million, while the group reported no borrowings.

That cash position is important as Nanshan seeks to expand from alumina into electrolytic aluminium in Indonesia. The company is undertaking preparatory work for the first phase of a 250,000-tonne-per-year electrolytic aluminium project next to its existing alumina operations.

The first phase carries an estimated investment of around USD 436.6 million and is expected to have an initial construction period of approximately two years. Nanshan plans a further 500,000 tonnes per year of electrolytic aluminium capacity in the medium term.

A bet beyond alumina prices

The Indonesia project could give Nanshan a larger presence further down the aluminium value chain and potentially reduce its dependence on alumina sales alone. However, it also introduces execution, capital-spending and power-cost risks at a time when the company’s core earnings have weakened.

Nanshan said it expects revenue and margins in its alumina business to improve if international alumina prices sustain their recovery trend.

For investors, the central question is whether a recovery in alumina prices can restore profitability before the company’s aluminium-smelting expansion requires significant cash deployment. For now, Nanshan’s first-half results show a business with higher sales volumes and a stronger balance sheet, but substantially reduced earnings power.

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