In 2012, UC Rusal made 4.173 million tons of primary aluminum

UC Rusal, with trade codes of 486 at HKSE, RUSAL/RUAL at Euronext and RUALR/RUALRS at MICEX, presents its financial results for 2012.

Operational results of the company were negatively influenced a lot by aluminum price at LME, that remained low during the whole period due to pessimistic investment expectations. The average aluminum price at LME declined by 15.7% to $2,018 per ton compared to $2,395 per ton a year before. Due to the initiatives of the management of UC Rusal for reduction in production expenses and optimization of circulation capital with an improvement of production assortment, weakening of ruble course and growth in premiums, UC Rusal demonstrated profitability by EBITDA of 12.1% in aluminum segment.

Primary aluminum production was 4.173 million tons, compared to 4.123 million tons in 2011. In Q4 2012, production declined by 2.1% to 1.038 million tons, compared to 1.060 million tons in Q4 2011. The share of products with added value increased from 36% to 39%.

Revenue increased by 2.4% from $2.563 billion in Q3 to $2.624 billion in Q4, due to the restoration of the metal price and record high premiums at a rate of $249 per ton.

Production price cost per ton in the aluminum segment declined by 1.9% to $1,946 in 2012, compared to $1,984 in 2011, due to the decline in power tariff by $0.00317 per kW/h in 2012 compared to $0.00348 in 2011.

Corrected EBITDA was $915 million. Profitability by corrected EBITDA was 8.4%. In Q4, corrected EBITDA increased from $130 million to $221 million due to the growth in revenue and reduction in expenses.

UC Rusal maintained stable position in liquidity. Free cash flow was $999 million, and circulation capital declined by 20% due to optimization in reserves. Net debt burden declined by $220 million.

In Q4 2012, the company signed the agreement with the majority shareholders of Norilsk Nickel GMK that will give an opportunity to improve the level of corporative governance in the GMK and provide guaranteed enlarged dividend flow.

The CEO of UC Rusal O. Deripaska gave the following commentaries about the results for 2012. In his opinion, last year was a challenge for the aluminum sector. Despite growth in global aluminum consumption by 6% to 47.4 million tons, pessimistic mood of the market resulted in fall by 15.7% in LME price. It made most of global aluminum production nearly unprofitable. For minimization of the negative influence of external factors, UC Rusal concentrated its efforts on achievement of long-term efficiency and control over expenses, but unfavorable market conditions and low aluminum price at LME influenced negatively the operational results of the company.

In 2012,  UC Rusal allocated over $1 billion to debt payment, including $441 million of own funds, providing better financial flexibility.

Translated by Nadezhda Poltoratskaya


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