MONTREAL - Alcan Inc. said Wednesday it plans to chop as many as 3,640 jobs as it faces an unprecedented fall in aluminum demand and lower prices for the metal.
In a Wednesday morning conference call with analysts, Alcan CEO Travis Engen said 5 to 7 per cent of the company's 52,000-strong workforce will be laid off. That works out to a cut of 2,600 to 3,640 jobs. Some facilities will be closed, but Engen could not say which ones.
The company will take a one-time restructuring charge of $250 million US in the fourth quarter.
The Montreal-based aluminum giant reported third quarter profits of $151 million US, down from $181 million US in the same quarter of last year.
On a per-share basis, the company made 46 cents a share. Excluding non-recurring items and foreign currency effects, the company made 37 cents a share.
The results were ahead of expectations. Analysts had been looking for the company to report per-share income excluding non-recurring items of 32 cents.
"We are pleased with the operating performance and the increase in operating cash flow, despite the ongoing economic weakness and declining aluminum prices," Travis Engen, Alcan's, president and CEO, said in a release.
Sales for the quarter were $3.16 billion US, up from $1.98 billion US a year ago. Sales were significantly higher than the year-ago quarter because of the merger with Alusuisse Group Ltd, which was completed in October 2000.
Faced with lower profits and a tough business environment, the company said its restructuring plan is designed to save $200 million US a year.
For 2002, the company expects business conditions to be challenging for at least the first six months. However, Alcan said it is comfortable with the $2.77 US per share earnings estimate from analysts surveyed by Thomson Financial/First Call, based on an average selling price of $1,565 US per tonne of aluminum.
The company says aluminum demand will fall 4.7 per cent this year, the worst slowdown in demand for the metal in decades.
Alcan shares were up 80 cents to $48.75 in late morning trading.
Written by CBC News Online staff |
