Alcoa has reported a smaller than expected quarterly profit, hurt by slumping prices for aluminium and other commodities and unfavourable foreign exchange rates.
"The biggest challenges were commodities prices being under pressure and the wide currency swings," Klaus Kleinfeld, Alcoa's chief executive officer told Reuters.
Alcoa said last month it will separate into two companies. One will provide "value added" materials such as airplane and car parts to manufacturers. The other, "upstream business" will consist of Alcoa's traditional aluminium smelting operations.
Alcoa said its third-quarter revenue slid to $5.6 billion, down 21% mainly due to closures of non-competitive facilities, Kleinfeld said.
The decline in revenue was partially offset by a 10% increase from aerospace, automotive and acquisition growth, he said.
"For us, when you look at the upstream side, our revenues are down, but some of it is absolutely part of the transformation and it is a good thing," he said.
Net income attributable to Alcoa fell to $44m, or 2 cents per share, in the third quarter ended September 30 from $149m, or 12 cents per share, a year earlier. Excluding special items, Alcoa earned 7 cents per share.
Analysts on average had expected Alcoa to earn 13 cents per share on sales of $5.65 billion, according to Thomson Reuters.
Benchmark London Metal Exchange prices fell to six-year lows toward the end of September, a nearly 20% drop from a year earlier.
The company believes global aluminium demand will grow by 6.5% in 2015 and will double during this decade, Kleinfeld said.
Alcoa lowered its forecast for the 2015 global aluminium surplus to 551,000 tonnes from its second-quarter estimate for a 762,000-tonne surplus.
It said it expects a aluminium market deficit in 2016, though it did not specify how much.
"On the value-add side, China does not play such an important role for us. Most of our business is in North America, Europe and developed countries," Kleinfeld said.
