Rusal’s Pre-Sanction Q1 Recurring Profit Jumped 22.4% to US$531 MM

Russian Federation aluminium smelter U.C. Rusal released first-quarter results late last week, showing solid growth in the period immediately prior to the Trump administration sanctions that hobbled the firm just days after the quarter’s close.

Rusal showed revenue of US$2.744 billion in the quarter, a 19.5-percent improvement over last year’s opening quarter, but essentially level pegging as compared to the quarter prior. Revenue from the sale of primary aluminium rose by 16.9 percent year-on-year thanks to a rise in prices at the London Metal Exchange. Alumina sales revenue jumped by 25.4 percent year-on-year due to both a sharp rise in alumina’s average sales price and a bump in sales volume in the quarter.

Adjusted EBITDA for the first quarter came in at US$572 million, up 20.4 percent from the previous year, but down a slight 2.4 percent from the fourth-quarter total of US$586 million.

Recurring profit for the period totaled US$531 million, 22.4 percent above last year’s first-quarter total of US$434 million, and 17.7 percent better than the prior quarter’s recurring profit of US$451 million.

Over the course of the first quarter, Rusal produced 931 thousand metric tons of primary aluminium, a 2.3-percent rise year-on-year, but a 1.5-percent decline from last year’s fourth-quarter total of 945 thousand metric tons. All but 7 percent of Rusal’s aluminium was smelted in Siberia in the quarter, and the firm’s overall smelter utilization totaled 97 percent.

Rusal refined 1.892 million metric tons of alumina in the just-ended quarter, up slightly from last year’s first-quarter total of 1.889 million metric tons, but down 5 percent from the prior quarter’s total of 1.991 million metric tons. Over one-third (36%) of Rusal’s alumina was refined at operations within the confines of the Russian Federation.

Rusal mined 2.960 million metric tons of bauxite in the first quarter, good for a 3.2-percent rise year-on-year, but nearly even from the fourth quarter’s total of 2.944 million metric tons. Sales in the quarter totaled 965 thousand metric tons, down 2 percent year-on-year from last year’s first-quarter total of 985 thousand metric tons, and down 3.5 percent quarter-on-quarter from the fourth-quarter total of 1 million metric tons.

While Rusal’s first-quarter results were overall positive, the firm paused to acknowledge the sanctions placed upon it by the United States government less than a week after the quarter’s close. Noting that the firm is still coming to grips with Washington’s sanctions upon it, Rusal informed investors that “it is highly likely that the impact may be materially adverse to the business.” Rusal went on to assure the market that it would fulfill its first duties, being those to creditors, investors, and shareholders, but warned that longer-term effects of these or any possible future sanctions remain in the realm of the unknown.



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