Rusal¡¯s revenue, net profit in Q1 2019 down 20.9% and 49.8% Y-o-Y

Russian aluminium giant UC Rusal reportedly announced its first quarter results where it mentioned that revenue dropped 20.9 per cent to US$2,170 million from US$2,744 million in the same period last year. Net profit also decreased by 49.8 per cent to US$273 million, compared with US$544 million in Q1 2018. Recurring profit for the period was at US$300 million, down 43.5 per cent from US$531 million in Q1 2018.

Commenting on the first quarter 2019 results, Evgenii Nikitin, CEO of RUSAL, said “The first quarter of the year was significantly challenged by the past year’s events, including the OFAC sanctions which were only lifted on 27 January 2019.”

According to the company’s results, adjusted EBITDA came in at US$226 million in Q1 2019, down 60.5 per cent from US$572 million in the corresponding period last year.

Sales of primary aluminium and alloys in Q1 2019 stood at 896,000 tonnes, whereas in Q1 2018 the sales were at 965,000 tonnes, down 7.2 per cent. This drop in aluminium and alloys sales also contributed to the decline of Rusal’s revenue and net profit in Q1 2019.

Besides sales, production also dropped in the said period. Around 928,000 tonnes of aluminium was produced in Q1 2019, compared with 931,000 tonnes in Q1 2018, down 0.3 per cent. Bauxite and alumina productions, on the other hand, amounted to 3,831,000 tonnes and 1,932,000 tonnes in Q1 2019, up 29.4 per cent and 2.1 per cent from 2,960,000 tonnes and 1,892,000 tonnes in Q1 2018.

Aluminium segment cost was down as well at US$ 1,633 per tonne, compared with US$1,686 per tonne in the same period last year. Aluminium price on the London Metal Exchange in Q1 2019 was at US$ 1,859 per tonne, down 13.9 per cent from US$2,159 per tonne in Q1 2018.

During Q1 2019, the aluminium price came under continued pressure, mainly due to seasonally weak period and the negative impact resulting from trade wars and US-China tensions. Rusal estimates these trends will continue to negatively impact the aluminum price in 2Q19, despite the benefits expected to materialise from a potential agreement between China and the US and certain positive economic indicators demonstrated by both the US and Chinese economies in March.

However, Evgenii Nikitin concluded, “In the coming months Rusal will focus on restoring its market position, including the share of value added products, which will be vital due to ongoing price uncertainty in the global aluminum market and continued U.S.-China tensions.”

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