Corus to sell aluminium division as profits soar
Corus to sell aluminium division as profits soar
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Thursday, 16, Mar 2006 02:01
Steelmaker Corus has announced its intention to sell a large part of its aluminium business as it posted strong profit growth in 2005.
The UK's largest steelmaker has signed a letter of intent with US firm Aleris on an ?826 million (£571 million) deal for Corus' downstream aluminium rolled products and extrusions businesses.
Under the terms of the proposed deal, Corus would retain ownership of its smelting operations and will supply Aleris' downstream operations, while the two firms would also enter into long-term research and development joint projects.
The announcement came as Corus reported pre-tax profits of £1.03 billion in 2005, up from £934 million the previous year, with turnover totalling £10.14 billion last year.
This was despite a fall in profits during the fourth quarter of the year, with the full-year figures beating market expectations.
Corus chief executive, Philippe Varin, believes the sale, if concluded, will benefit the firm.
"The proposed sale of the downstream aluminium operations to Aleris secures a strong future for these businesses, represents good value for Corus and is an important step in the group's strategy," Mr Varin said.
Commenting on the firm's annual results, the chief executive was pleased with the "strong" figures given the "challenging" conditions during the second half of the year.
"As the year progressed and market conditions became more challenging, our performance clearly demonstrated the strong foundations laid by the Restoring Success [restructuring] programme," Mr Varin said.
"The performance improvements, continued disposal of non-core assets and strengthened balance sheet provide a strong platform from which we can enter the next phase of our development."
Corus shares rose six pence to 82.25p this lunchtime on the back of this morning's double announcement.