Focus On Alcan’s Value, Not Takeover Talk

Article Excerpt

ALCAN INC. $60 (Toronto symbol AL; Conservative Growth Portfolio, Resources sector; Shares outstanding: 366.7 million; Market cap: $22.0 billion; SI Rating: Average) is the world’s third-largest producer of aluminum, after U.S.-based Alcoa Inc. and Rusal, a Russian company. It also makes aluminum products for the aerospace and automotive industries. In the three months ended December 31, 2006, Alcan earned $1.09 a share (total $406 million), roughly double its year-earlier profit of $0.54 a share ($205 million). Sales grew 24.0%, to $6.2 billion from $5.0 billion, thanks to a 30% jump in aluminum prices. Cash flow per share jumped to $2.22 from $1.09. (All amounts except share price in U.S. dollars.) Alcan now aims to increase its capacity by a third in the next few years. It’s building a $550 million facility in Quebec that will use a new process that cuts electricity needs. It also hopes to spend $1.8 billion to modernize its smelter and power plant in Kitimat, B.C. Alcan plans to…

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