While the Q4 loss is not as steep as its $1.2bn Q4 loss a year earlier, the aluminium maker’s results show that it has not roared back into profitability yet, despite massive restructuring, layoffs, idling of plants and steep cuts in capital spending and dividends.

Ever since the final months of 2008 when the world’s economy took a sudden downturn, putting downward pressure on the price of aluminum, Alcoa has been struggling to conserve cash and reduce costs. The company said that most of its loss in the fourth quarter, about $266M, is attributable to restructuring special items and tax charges.

“This was a tough year for the aluminium industry – a price crash, demand destruction, and credit crunch. Yet, today Alcoa is stronger than when the year started,” said Klaus Kleinfeld, Alcoa president and chief executive. “We reshaped our cost structure and portfolio for profitable growth. And we built the cash reserves to weather current economic uncertainties and invest in opportunities for future growth.”

It said that due to cost cuts and restructuring, the company has reduced its debt by $759M compared to a year ago and had $1.5bn in cash liquidity. Alcoa is being helped by steadily rising aluminium prices and a drop in world inventories for aluminium and alumina.

Alcoa said that its cost-cutting will benefit it in coming years. Mr Kleinfeld is estimating that consumption of aluminium will continue to grow worldwide as China, India and other industrialising nations build with more aluminium.