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RUSAL announces results for three months ended 31 march 2019

Metal News - Published on Tue, 14 May 2019

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RUSAL announced its results for the three months ended 31 March 2019.

Kev highlights
1. Revenue in the first quarter of 2019 dropped by 20.9% to USD 2,170 million as compared to USD2,744 million for the same period of 2018 following the decrease in the London Metal Exchange aluminium price by 13.9% to USD 1,859 per tonne as compared with USD 2,159 per tonne for the comparable period.

2. Adjusted EBITDA fell by 60.5% to USD 226 million for the first quarter of 2019, as compared to USD 572 million for the corresponding period of 2018.

3. Aluminium segment cost per tonne decreased by 3.1% to USD 1,633 for the first quarter of 2019 as compared to USD 1,686 for the same period of 2018 primarily due to depreciation of Russian Rouble against US dollar between the comparable periods.

4. On 29 April 2019 placement of the exchange-traded rouble bonds in the amount of RUB 15 billion with a coupon rate 9.0% was completed and the exchange-traded rouble bonds commenced trading on the Moscow Exchange. Maturity of the bonds is ten years subject to bondholders' put option exercisable in April 2022. In addition to the placement, RUSAL entered into the cross-currency interest rate swap, which resulted in the exchange-traded rouble bonds exposure being translated in full amount in the US-dollar exposure with the maturity of 3 years with the interest rate of 4.69%.

Commenting on the first quarter 2019 results, Evgenii Nikitin, CEO of RUSAL, said that “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. The short OFAC General License extensions impacted the sales structure: in the first quarter of 2019, sales of value added products decreased by 29% to 259 thousand tonnes of total aluminium sales and resulted in a reduction of revenue and net profit, whereas in the first quarter of 2018, these sales accounted for 48% of total sales or 436 thousand tonnes.
Following the reduction of the London Metal Exchange aluminium price by 13.9% to USD 1,859 per tonne, compared to USD2,159 per tonne between the comparable periods, revenue decreased by 20.9% to USD2J70 million in the first quarter of 2019 compared to USD2,744 million for the same period of 2018. RUSAL's net profit decreased by 49.8% and amounted to USD273 million, compared to USD544 million in the first quarter of 2018.
In the coming months RUSAL will focus on restoring its market position, including the share of VAPs, which will be vital due to ongoing price uncertainty in the global aluminium market and continued US-China tensions. We will redouble our efforts on stronger interaction with our current customers, as well as development of new competitive technologies, whilst continuing our cost reduction programs. Moreover, in the coming years, the Company will allocate considerable funds to implement investment projects, which have already been announced, in order to continue modernizing key equipment at the Company's facilities. In addition, RUSAL will promote its products to foreign markets, such as its low carbon aluminium brand ALLOW, to reestablish and reinforce its high quality customer service.”

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Posted By : Rabi Wangkhem on Tue, 14 May 2019
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