BEIJING, Oct 27 (Reuters) - China Hongqiao Group, the world's biggest aluminium producer, said net profit for the first half of 2017 fell by 54.8 percent from a year ago after a 3.36 billion yuan ($505 million) charge because of capacity closures tied to the government's supply-side reforms.
Hongqiao, making its first proper results disclosure in over a year, reported net income of 1.48 billion yuan for the first half, versus 3.28 billion yuan a year earlier. The company also said it has applied for its shares to resume trading on Oct. 30 after a seven-month hiatus.
Revenues were 46.2 billion yuan, up 82.1 percent from a year ago because of higher aluminium prices.
The company said it took the writedown after part of its production was suspended to comply with the government's reform of industry capacity and increases in some raw material prices.
Hongqiao's massive impairment gives an indication of how much smelters have been hurt by the Chinese government's intensifying crackdown on aluminium firms, which have expanded at a ferocious pace over the past few years.
Hongqiao was forced to close 2.68 million tonnes per year of illegal smelting capacity by the end of July, with the cuts being gradually implemented ahead of time.
However, analysts believe the company has been spared making a full 30 percent cut to its aluminium production this winter, as China imposes environment curbs on industry.
For the whole of 2016, Hongqiao said its profits were 6.85 billion yuan, up 84.8 percent from a year ago. Aluminium prices averaged $1,632 per tonne in 2016, 32 percent below current levels.
Revenues came in at 61.4 billion yuan for the full year, up 39.2 percent from 2015.
In January, Hongqiao issued a positive profit alert, saying it expected a year on year profit increase of 70 percent to 100 percent in 2016.
However, before the financials were published, a report by Emerson Analytics alleged Hongqiao was understating its costs and inflating its profits, causing a steep drop in the company's share prices and a delay in the disclosure.
As a result, trading in its shares has been suspended since March. Hongqiao on Thursday reiterated that it refuted the allegations.
Hongqiao has proposed a final dividend of HK$0.27 ($0.035) per share for 2016, as well as a special dividend of HK$0.20 per share. ($1 = 6.6513 Chinese yuan renminbi) ($1 = 7.8038 Hong Kong dollars) (Reporting by Tom Daly; Editing by Christian Schmollinger)