Corus' shares soar on sale news

Corus is selling its aluminium products business

Steelmaker Corus saw its shares end up 12% on Thursday after the news that it is selling its aluminium division to US firm Aleris for £570m ($1bn).

The firm made the announcement as it unveiled a 2% rise in annual pre-tax profit to £580m in 2005.

Corus said that a 16% rise in average steel prices during 2005 more than offset the impact of rising raw materials and energy costs.

Yet it said energy costs were £20m higher in the first quarter of 2006.

'Value added' steel

The recent spike in wholesale UK gas prices will have alarmed the company, which uses a huge amount of the fuel as part of the steel production process.

Corus, the world's eighth-largest steel maker by volume, said that global steel demand rose by 4% last year.

The firm said it was focusing on producing "value added" steel products and wanted 60% of its deliveries to meet this criterion by 2008.

It is looking to increase operational efficiency and focus on high growth areas, and said it was looking for acquisitions outside of Western Europe.

Corus employs 24,000 people in the UK at sites including Rotherham, Port Talbot and Scunthorpe.

Since 2003, the company has cut hundreds of jobs and made significant changes to working practices.

It has invested £130m at its Rotherham plant, and a further £152m at its low-cost Ijmuiden site in the Netherlands.