Rusal 1H 2011 net profit eases to $1.085 billion, but with debt outlook improving

The world’s largest aluminium producer, Rusal, has posted a 1H 2011 net profit of $1.085 billion under IFRS.

The 1H net result is down 20.5% from the 1H 2010 net profit of $1.365 billion, with 1H Adjusted EBITDA rising 7.5% year on year to $1.425 billion, as 1H revenues climbed 18.8% year on year to $6.323 billion.

The company noted that its adjusted net profit was actually up $24.5% year on year to $559 million from $449 million a year earlier, with the reported net result reflecting increasing charges on restructured debts and a decrease in its share of the results of Norilsk Nickel, in which it holds a 25% stake.Rusal also noted that the increase in 1H revenues reflected increased sales prices and an improved product mix, with higher value added products accounting for 37% of total aluminium production, compared to 29% a year earlier.

Rusal CEO, Oleg Deripaska said the results reflected a solid performance in a difficult market environment.

“The first half of 2011 has been characterised by challenging market conditions across the whole metals and mining industry. However, UC RUSAL’s focus on raising the efficiency of the Company’s business with good cost pressure management, has resulted in the Company being the most efficient aluminium producer worldwide, with an adjusted EBITDA margin of 22.5%. RUSAL has delivered a solid set of operational results, with revenues and all the major financial indicators increasing year on year. It is particularly satisfying to report that Adjusted Net Profit, which indicates the profitability of UC RUSAL core business, increased by 24.5% in reporting period.”

Deripaska also noted that Rusal had had made inroads into its debt load, paying down $1.67 billion through 2 rouble bond issues in March and April 2011, with a further $600 million from cash flows, while extending the maturity of $4.58 billion owed to Sberbank from December 2013 to August 2016.

“The last six months have seen the Group make significant strides in refinancing its debt ahead of schedule with new facilities agreed with a syndicate of leading international and Russian lenders. These new facilities will provide UC RUSAL with greater operational and financial flexibility as we look to meet the continuing aluminium consumption demand in both established and fast-growing emerging markets.”

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