RUSAL announces results for the three and nine months ending 30 September 2015

UC RUSAL, a leading global aluminium producer, announces its results for the three and nine months ended 30 September 2015.

Key highlights

• In the third quarter of 2015 London Metal Exchange (“LME”) aluminium price continued its sharp decline and reached an average of USD1,589 per tonne, recorded low since the second half of 2009, demonstrating a 20.0% decrease compared to USD1,987 per tonne in the third quarter of the prior year. This negative trend was compounded by significant decrease in the realized premiums over the LME aluminium price down to an average of USD206 per tonne in the three months ended 30 September 2015, 51.2% lower than USD422 per tonne in the third quarter of 2014.

• However, the Company managed to withstand the negative industry environment and record an Adjusted EBITDA of USD420 million with Adjusted EBITDA margin of 20.3% for the third quarter of 2015 as compared to 19.0% for the same period of the prior year. Adjusted EBITDA for the first nine months of 2015 reached USD1,709 million with Adjusted EBITDA margin of 25.1% as compared to USD863 million and 12.6% for the same period of 2014.

• As a result of continuing focus on efficiency and cost reduction initiatives undertaken by the management supported by weakening local currency aluminium segment cost per tonne decreased by 17.2% to USD1,440 in the third quarter of 2015 in comparison with USD1,739 per tonne in the same period of 2014.

• Revenue in the third quarter of 2015 decreased by 16.3% to USD2,073 million as compared to USD2,477 million in the same quarter of 2014 with average realized price decreased by 19.8% to USD1,843 per tonne for the reporting quarter as compared to USD2,298 per tonne in the same period of 2014.

• The Company achieved Adjusted Net Profit and Recurring Net Profit of USD181 million and USD287 million, respectively, for the third quarter of 2015 as compared to USD25 million and USD250 million for the same period of the prior year.

• In August 2015 the Board of the Company has approved a new dividend policy for the subsequent periods to pay dividends at the level of 15% of the Company’s Covenant EBITDA. The payment of dividends will be subject to compliance with requirements of the Group’s credit facilities, including financial covenants, and relevant Jersey legislation. Further in October 2015, the Board of the Company has approved an interim dividend for the financial year ending 31 December 2015 in the aggregate amount of USD250 million (US Dollar 0.01645493026 per ordinary share) to be paid in cash. Dividends were paid on 6 November 2015.

Commenting on the third quarter 2015 results, Vladislav Soloviev, CEO of RUSAL, said:

‘During the third quarter of 2015, the aluminium industry was under significant pressure from sliding prices and premiums due to a higher than expected market surplus owing to weaker demand in some emerging markets and capacity growth in the Middle East, India and China. In light of these factors, we have further reduced our initial global aluminium demand growth forecast for 2015 from 6% to 5.6% and increased the surplus forecast to 373kt in 2015.

Production discipline and cost control remain the key principles of RUSAL’s operational strategy. RUSAL has maintained a flat rate of cost of sales quarter-on-quarter with cash cost per tonne reaching a multi-year low of USD1,440 per tonne in the third quarter of 2015. While pricing pressure in the third quarter of 2015 has inevitably led to a decrease of revenue and adjusted EBITDA, the Company has managed to demonstrate a healthy adjusted EBITDA margin of 20% and posted a Recurring Net Profit of USD287 million in the third quarter of 2015.

While the market situation remains highly challenging, the importance of the aluminium industry’s sustainable development has acquired greater importance ahead of the upcoming 2015 Paris Climate Conference (COP21). Aluminium production requires large amounts of electricity that is often generated by burning fossil fuels such as coal. RUSAL is proud to be one of the most efficient global producers in terms of carbon emissions thanks to its use of hydro power. The Company will continue to further improve its carbon footprint and aims to achieve 100% of its energy from clean hydro power for its aluminium production.’

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