Rusal Fattens the Profits from Aluminium Sales

Sep 5th, 2017

RUSAL, the sixth largest aluminium company in the world, announces about the revenue growth by 7.4$ in the 2nd quarter of 2017. Within this period the company earned $2,467 bln due to the two factors: slight price rise for aluminium at London Metal Exchange (LME) and the increase of VAP products in the entire volume of the aluminium sales. Compared to the first quarter, the share of the VAP products grew by 4, 9%.

In the first quarter of 2017, the adjusted net profit of the company comprised $465 million and normalized net profit was $686 million. It is much bigger than those indices in 2016 ($67 million and $425 respectively).   Due to a range of cost cutting measures and progress-generating, the adjusted EBITDA in the 2nd quarter of 2017 grew up to $ 510 million. A stronger ruble, the increase of transportation rates and the raising expenditures on raw materials altogether increased the prime cost of aluminium by 6% ($1497 per tonne).

Moreover, the profit growth was possible due to the successful draw of the foreign market investments. RUSAL made a new agreement on pre-export financing in the amount of $1, 7 bln with the payoff time which will start two years after.   The company has reached the agreement with SBERBANK on the extending the ultimate maturity deadline into 2024 on Norilsk Nickel share mortgage.

Overall, the first part of the current year was favourable for RUSAL. The world aluminium consumption grew by 5, 7%. Additionally, the global market except for China experienced the shortage of this metal which led to aluminium price growth at LME.

The forecast for the aluminium industry in the 2nd quarter is positive. The experts note that after the closure of some manufacturing facilities in China, the shortage of aluminium at the world market will increase to 1 million tonnes amid the growth of consumption which by the end of 2017 will reach 6%. Doubled net profit of RUSAL will reduce the debt burden of the company and help expand its investment program. Russian aluminium giant will increase its competitiveness by expanding the range of products (alloys) with high added value.