Better Aluminium Market, Increased Operational Efficiency Yield Stellar Bottom Line for Rusal in Q3

Rusal

Russian Federation aluminium titan U.C. Rusal released financial and production results for the third quarter yesterday. Improvements both within the company and to the global aluminium market contributed to increased financial numbers nearly across the board.

Revenue in the quarter came to US$2,460 million, better by 19.4 percent year-on-year from last year’s third-quarter total of US$2,060 million, but off by 0.3 percent quarter-on-quarter from last quarter’s total of US$2,467 million. Rusal credits the global recovery in aluminium prices for the rise as well as the company’s increase in value-added products (VAP), which accounted for half of its total aluminium sales.

Adjusted EBITDA came to US$549 million, up by 30.4 percent year-on-year from last year’s third-quarter total of US$421 million, and up 7.6 percent from the second-quarter total of US$510 million. In addition to the aforementioned rise in aluminium prices, Rusal says that its focus on operational efficiency and cost discipline yielded the improvement seen in these numbers.

Adjusted net profit for the third quarter totaled US$262 million, 44.8 percent above last year’s third-quarter total of US$181 million, and 27.9 percent better than last quarter’s adjusted net profit of US$202 million.

Sales of primary aluminium in the quarter were lighter year-on-year, totaling 968 thousand metric tons. That total was off by 1.3 percent from last year’s third-quarter total of 981 thousand metric tons, and off by 3.4 percent from the second-quarter total of 1,002 thousand metric tons.

Rusal churned out 931 thousand metric tons of primary aluminium in the quarter, a 1.2-percent improvement year-on-year from last year’s third-quarter total of 920 thousand metric tons, and a 1.1-percent rise quarter-on-quarter from last quarter’s total of 921 thousand metric tons.

Alumina production rose in the quarter, totaling 1,965 thousand metric tons, up 5.4 percent year-on-year from last year’s third-quarter total of 1,865 thousand metric tons, and up 1.9 percent from last quarter’s production total of 1,928 thousand metric tons.

Bauxite production was off for the quarter, totaling 2,742 thousand metric tons, down by 14.6 percent from last year’s third-quarter total of 3,211 thousand metric tons and lower by 11.3 percent from the second quarter’s total of 3,090 thousand metric tons.

Rusal’s CEO Vladislav Soloviev said that the quarter’s results were the product of both internal and external improvements, and that the future of both the company and the aluminium sector appeared to be strong.

“3Q2017 was another successful period for RUSAL. On the back of robust aluminium demand and growing LME price, the Company reported strong financial results in the reporting quarter and in the first nine months of 2017.

“Revenue growth for the first nine months of the year was 21.3%, reaching USD7.2 billion. In 3Q2017 RUSAL set another record in sales of value added products with the latter reaching 50% in total sales for the first time. The Company remains committed to its sales and marketing strategy and is on track to increase its share of VAP in the product mix to 60% by 2021.

[…]

“As consumers become more demanding about the provenance of the products they purchase and their associated carbon footprint, post reporting period end, RUSAL launched its new bespoke brand for low carbon aluminium – ALLOW with a certified carbon footprint of lower than 4 tonnes of CO2 per tonne of aluminium, significantly lower than the industry average. ALLOW will provide consumers and manufacturers alike with confidence that the aluminium from RUSAL used in their products has one of the lowest carbon footprints in the industry.”

Overall Rusal estimated global aluminium demand for the calendar year to total 63.1 million metric tons, a 5.9-percent rise over last year’s total. Aluminium supply for the year will total 62.4 million metric tons, the company forecasts, a 5.3 percent rise over 2016.



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