SHARES of Aluminum Corp. of China Ltd., the nation’s biggest producer of the light metal, surged yesterday in Hong Kong and Shanghai trading after the firm said Saturday it returned to profit last year as it cut costs and sold assets to its parent.

    Net income was about 1 billion yuan (US$165 million) in 2013, compared with a record net loss of 8.23 billion yuan in 2012, the firm, also known as Chalco, said in a statement Saturday, citing unaudited preliminary results.

    Chalco’s Shanghai-listed A shares surged 9.72 percent to close at 3.50 yuan, while the firm’s Hong Kong-listed shares closed up 6.95 percent at HK$2.77 (US$0.36).

    Chalco is striving to turn around losses exacerbated by the industry’s excess capacity, as China puts pressure on State companies to improve profitability. The Beijing-based aluminum producer’s profit would be its biggest since 2007.

    “After having made a year of accounting profit, and avoiding consecutive years of losses, there is less pressure on the company,” Barclays analysts led by Ephrem Ravi said in a report Friday. “Frantic disposals to the parent company that we saw in 2013 are unlikely to be repeated.”

    One-time gains from the asset sales are close to 8 billion yuan which implies the underlying operations were still loss-making, according to the report.

    Chalco sold its aluminum fabrication business in June to its parent for about US$1.3 billion. It is selling its 65 percent stake in the Simandou iron-ore project in Guinea. (SD-Agencies)