Despite Sanctions, Rusal’s Sales Of Alumina Jumped By 26.8 Percent In 2018

Despite Sanctions, Rusal’s Sales Of Alumina Jumped By 26.8 Percent In 2018

Russian Federation aluminium titan U.C. Rusal reported financial and production results for 2018 yesterday, turning in strong numbers especially in light of the sanctions placed upon it for the majority of the year by the United States government.

In 2018, Rusal smelted 3,753 thousand metric tons of primary aluminium, 1.2 percent above the prior year’s total of 3,707 thousand metric tons. The firm sold 3,671 thousand metric tons of primary aluminium, down by 7.2 percent on the year. Total sales of primary aluminium came to US$8,293 million, off by 0.4 percent on the year from 2017’s total of US$8,324 million. A 7.3-percent increase in the weighted-average realized aluminium price was almost entirely canceled out by the drop in sales.

Last year saw Rusal refine 7,774 thousand metric tons of alumina, essentially level on the year. The firm sold 1,930 thousand metric tons in 2018, a 4.4-percent drop on the year from the prior year’s sales total of 2,108 thousand metric tons. Sales totals rose by 26.8 percent on the year however, from US$769 million two years ago to US$975 million in 2018, largely rising due to an overall increase in per-unit price.

Rusal mined a total of 13,847 thousand metric tons of bauxite ore in the previous fiscal year, an increase of 18.9 percent from 2017’s total haul of 11,645 thousand metric tons.

Rusal’s revenue for the year totaled US$10,280 million, a 3.1-percent improvement on the year from the previous year’s total of US$9,969 million. Adjusted EBITDA in 2018 came to US$2,163 million, good for a 2-percent bump over the prior year.

Profit for the year totaled US$1,698 million, a 39-percent leap beyond 2017’s total of US$1,222 million. Adjusted net profit figured at US$856 million in 2018, a drop of 20.5 percent from the previous year’s adjusted net profit of US$1,077 million.

Rusal’s CEO Evgenii Nikitin greeted the strong numbers with praise for the firm’s management in thriving despite significant obstacles.

“Despite the OFAC Sanctions, RUSAL’s robust full year results demonstrated skillful crisis management alongside the ability to adapt to a new operations’ environment. It maintained its strong market position through its high managerial competence and operational flexibility. In 12M18, aluminium production totaled 3,753 thousand tonnes which is a 1.2% increase compared to the prior year. Total production dynamics remained largely stable with capacity utilization reaching 96%.”

“The key achievement of the year is that despite the OFAC Sanctions, the Company remained highly operational, avoided any seismic personnel cuts whilst maintaining well-established multi-industrial supply chains in the countries of operation; this signaled to customers and investors that our business model remains efficient, even in difficult times,” he continued.

“Looking ahead into 2019 and the forthcoming years, we expect aluminium demand to recover after the trade wars and supply shocks of late 2018,” Nikitin predicted. “Alongside forecasting markets outside China to be in heavy deficit in 2019, we are confident that RUSAL is fully capable to leverage this trend.”