Alumina revises impact of gas crisis

10/07/2008 - 16:48

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The state gas crisis is expected to cut Alumina Ltd's underlying earnings by $31 million for the June quarter after the company revised down the impact for the month of June.

The state gas crisis is expected to cut Alumina Ltd's underlying earnings by $31 million for the June quarter after the company revised down the impact for the month of June.

The company had previously estimated the impact on earnings for the June month to be between $12-17 million after tax, but today confirmed the actual impact from the gas supply disruption would be $7 million.

"The impact for Alumina Ltd's underlying earnings for the third quarter of 2008 is now estimated to be A$31 million after tax," Alumina said in a statement.

"This estimate is dependent on gas supplies being restored by mid August 2008 and excludes a future insurance reimbursement for the increased costs and lost revenues.

Early last month Alcoa of Australia, which is 60 per cent owned by US based Alcoa and 40 per cent by Alumina, declared force majeure on its supply contracts for alumina.

Below is the full announcement:

Alumina Limited previously advised on 11 June 2008 the financial impact to Alumina Limited's underlying earnings for June 2008 arising from the shutdown of the Varanus Island gas supplies, was estimated to be A$12-17 million (after tax). The Company now confirms that the actual impact from the gas supply disruption on underlying earnings for June 2008 was A$7 million (after tax).

The impact for Alumina Limited's underlying earnings for the third quarter of 2008 is now estimated to be A$31 million after tax. This estimate is dependent on gas supplies being restored by mid August 2008 and excludes a future insurance reimbursement for the increased costs and lost revenues. Alcoa World Alumina & Chemicals is working with its insurers to determine the recoverable amounts for the increased costs and lost revenues, and will net these reimbursements against any costs in future quarters.

Alumina Limited's 2008 half year results will be released on 31 July.

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