RUSAL¡¯s profit and revenue shrink further in the nine months ended 30 September of 2019

RUSAL, a leading global aluminium producer, announced its results for the third quarter and nine months ended 30 September 2019. The company reported revenue of USD7,222 million in the nine months ended 30 September of 2019, down 8.8% from USD7,915 million for the same period of 2018, which was partially offset by a 9.8% increase in primary aluminium sales volume.

Revenue from sales of primary aluminium and alloys decreased by 7.6%, to USD5,946 million in the nine months, as compared to USD6,438 million last year. Revenue from alumina sales decreased by 30.2% year-on-year to USD502 million. This was due to a decrease in the sales volumes by 14.8% together with a decrease in the average sales price by 17.8%.

Revenue from sales of foil and other aluminium products increased by 15.7% YoY to USD317 million for the nine months ended 30 September of 2019. Revenue from other sales, including sales of bauxite and energy services decreased by 5.6% YoY to USD457 million.

The Total cost of sales increased by 6.0% to USD6,012 million in nine months, as compared to USD5,672 million for the corresponding period of 2018. The increase was primarily driven by 9.8% growth in primarily aluminium sales volume, partially offset by depreciation of Russian Rouble against the US dollar.

Adjusted EBITDA decreased from USD1,800 million to USD765 million in the nine months ended 30 September of 2019. Net profit stood at USD819 million for the nine months, as compared to USD1,549 million for the same period of 2018.

Evgenii Nikitin, CEO of RUSAL, said: “In the first nine months of the year, the market environment was challenging with sharply falling aluminium price. Coupled with the considerable decline of RUSAL’s realized premiums by over 20% primarily due to reduced share of VAP sales influenced by the sanctions, this led to substantial decrease of RUSAL’s revenue and EBITDA and affected our financial results.

However, throughout this year we continued to gradually recover VAP sales and reached 40% in the third quarter, compared to just 29% in the first quarter. We expect the VAP share to restore in the beginning of 2020, following the results of the “mating season”.

While the potential for future price recovery and market growth is still largely undermined by the ongoing USChina trade tensions, positive signs in the automotive markets across Europe and South America and the interest rate cut in Russia should boost demand for end-use aluminium in the upcoming year.”

RUSAL expects that global primary aluminium demand will be unchanged year-on-year in 2019 to 66 million tonnes, and the overall balance to be in deficit of around 1 million tonnes.

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