Weak Fourth Quarter Drags Rusal’s 2019 Financials Down As Greater Impact From Coronavirus Looms Ahead

Weak Fourth Quarter Drags Rusal’s 2019 Financials Down As Greater Impact From Coronavirus Looms Ahead

Russian Federation aluminium giant U.C. Rusal released financial results for 2019 this week, reporting a sharp increase in net losses during the year’s final quarter. The firm predicted the recent coronavirus outbreak is likely to make a significant impact upon the global aluminium market in the current year’s opening half.

Rusal reported an adjusted net loss of US$138 million for last year’s closing quarter, compared to a net loss of US$17 million in the prior year’s final quarter. Earnings before interest, tax, depreciation and amortisation (EBITDA) totaled US$201 million in the fourth quarter, down by 45 percent on the year, while fourth-quarter revenue totaled US$2.5 billion, good for a 5-percent increase year over year.

“It is no understatement to say that during the last year, both RUSAL and the whole industry witnessed a variety of challenging conditions that included the average LME aluminium price slumping by over 15%, which contributed to our annual revenue decrease, as compared with the 2018 results,” said Rusal’s CEO Evgenii Nikitin in a corporate press release. “The situation was aggravated by the missed mating season that was the result of the OFAC sanctions.”

Rusal stated an aluminium production total for the year of 3.8 million metric tons of primary aluminium, which was on par with the prior year. However, sales for the year jumped by 13.8 percent to 4.2 million metric tons, largely due to the sale of stock accumulated during OFAC sanctions.

“In 2019, we continued to deepen our customer relationships, as we have managed to return to the VAP market and renewed a number of long-term contracts, while moving forward with strengthening our market position as the world’s largest producer of green aluminium,” concluded Nikitin.

Shares of Rusal stock were off by 8 percent yesterday on the news, compounding an already week year for the firm’s trading, which has seen a 21-percent drop in stock value since January 1.