Analysts expect Comalco, Australia's biggest producer of aluminium, will report on average a joint venture pre-abnormal net profit of about A$121 million in the six months ended June 30, 1998, compared with A$69.6 million in the previous corresponding period.

Forecasts ranged from as low as A$105 million to as high as A$149 million.

Comalco, owned 68.14 per cent by Rio Tinto, recorded joint venture pre-abnormal net earnings of A$220.2 million in calendar 1997, compared with A$32.9 million in 1996.

"Comalco should surprise. In this environment given weaker commodity prices Comalco will be the stand out making very good money," said Shaw Stockbroking analyst John Colnan.

Last month Comalco said its primary aluminium production rose to 320,119 tonnes in the six months to June 30, up 26.7 per cent from 254,737 tonnes in the previous first half.

The much higher output was due to additional metal from the company's new third line at its Boyne Island smelter in Queensland and an upgrade at the Tiwai Point smelter in New Zealand.

Comalco's total share of aluminium production from the Boyne Island, Tiwai Point and Bell Bay (Tasmania) smelters is just over 650,000 tonnes a year.

Most analysts said Comalco's earnings had the potential to surprise on the upside because the company had recently shown a good track record of cutting costs.

At its annual meeting in April, Comalco said it cut its operating costs by A$80 million in calendar 1997 and expected annual cost savings were now running at a rate of well over A$100 million a year.

Comalco has said previously that for every one US cent rise in the price of aluminium the group's net profit rises by about A$12 million over a full year based on annual sales of 650,000 tonnes of aluminium.

For every one US cent decline in the value of the Australian dollar net profit rises by A$9 million over the a one year period.

The three-month price of aluminium averaged about 64 US cents per pound on the London Metal Exchange (LME) during the first six months of 1998 compared with 72 cents a year earlier.

The Australian dollar averaged 65 U.S. Cents for the half compared with 77 cents for the first half of 1997.