13.05.2016, 13:00
UC RUSAL Announces Results for 1Q 2016
OREANDA-NEWS. UC RUSAL, a leading global aluminium producer, announces its results for the three months ended 31 March 2016.
Key highlights
· RUSAL continued to see challenging environment in the aluminium industry in the first quarter of 2016. Average London Metals Exchange (“LME”) aluminium price increased by 1.3% to USD1,515 for the first quarter of 2016 as compared to USD1,495 in last quarter of 2015, while the average realized product premium for the same period decreased by 3.9% and the average sales price decreased by 3.6% to USD1,666 in the first quarter of 2016 as compared to USD1,729 in the preceding quarter.
· Revenue in the first quarter of 2016 decreased by 22.7% to USD1,914 million as compared to USD2,477 million in the first quarter of 2015 due to the 15.9% decrease in LME aluminium price, and sharp decline in the average realized premiums to USD172 per tonne in the first three months of 2016 from USD424 per tonne in the respective period of the prior year.
· Aluminium segment cost per tonne decreased by 11.5% to USD1,326 in the first quarter of 2016 in comparison with USD1,499 per tonne in the same period of 2015 and by 6.0% compared to USD1,410 per tonne in the preceding quarter resulting from continuous cost control measures and external factors such as depreciation of the Russian Ruble to the US dollar and decrease in raw material prices. Ongoing decrease in cost per tonne allowed the Company to maintain steady EBITDA margin at 16.3% and leverage ratio below 3.0.
· On 19 April 2016, the Company successfully completed a placement of RUB10 billion of the exchange-traded ruble bonds of OJSC RUSAL Bratsk series BO-01. Maturity of the bonds is ten years subject to a put option exercisable in three years.
· On 26 April 2016 the Company entered into an amendment and restatement agreement with the lenders under the Combined PXF Facility to introduce new refinancing tranches under the Combined PXF Facility. On 29 April 2016 the Company prepaid three scheduled repayment instalments falling due in 2016 under the Combined PXF Facility in the total amount of USD524 million, utilizing USD415 million of available commitments under the new refinancing tranches as well as USD109 million of the Company’s own funds. The Company’s obligation to repay the scheduled instalments under the Combined PXF Facility for the year 2016 has been discharged in full.
Commenting on the first quarter 2016 results, Vladislav Soloviev, CEO of RUSAL, said:
“During the first quarter of 2016 amid turbulent commodity markets, RUSAL’s continued focus was on tighter cost controls and operational efficiency. During the reporting period, the Company reduced its aluminium cash cost per tonne to USD1,326.
“Post quarter end, RUSAL reached new agreements with its lenders and fully executed its obligations to repay scheduled installments under the Combined PXF Facility in 2016. This refinancing represents a substantial move for the Company’s debt profile. Further deleveraging remains a priority for RUSAL in order to support our financial position.
“Positive dynamics witnessed in the aluminium sector are supported by an accelerating ex-China deficit and solid demand fundamentals as the transportation sector continues to fuel global demand growth in primary aluminium.”
Key highlights
· RUSAL continued to see challenging environment in the aluminium industry in the first quarter of 2016. Average London Metals Exchange (“LME”) aluminium price increased by 1.3% to USD1,515 for the first quarter of 2016 as compared to USD1,495 in last quarter of 2015, while the average realized product premium for the same period decreased by 3.9% and the average sales price decreased by 3.6% to USD1,666 in the first quarter of 2016 as compared to USD1,729 in the preceding quarter.
· Revenue in the first quarter of 2016 decreased by 22.7% to USD1,914 million as compared to USD2,477 million in the first quarter of 2015 due to the 15.9% decrease in LME aluminium price, and sharp decline in the average realized premiums to USD172 per tonne in the first three months of 2016 from USD424 per tonne in the respective period of the prior year.
· Aluminium segment cost per tonne decreased by 11.5% to USD1,326 in the first quarter of 2016 in comparison with USD1,499 per tonne in the same period of 2015 and by 6.0% compared to USD1,410 per tonne in the preceding quarter resulting from continuous cost control measures and external factors such as depreciation of the Russian Ruble to the US dollar and decrease in raw material prices. Ongoing decrease in cost per tonne allowed the Company to maintain steady EBITDA margin at 16.3% and leverage ratio below 3.0.
· On 19 April 2016, the Company successfully completed a placement of RUB10 billion of the exchange-traded ruble bonds of OJSC RUSAL Bratsk series BO-01. Maturity of the bonds is ten years subject to a put option exercisable in three years.
· On 26 April 2016 the Company entered into an amendment and restatement agreement with the lenders under the Combined PXF Facility to introduce new refinancing tranches under the Combined PXF Facility. On 29 April 2016 the Company prepaid three scheduled repayment instalments falling due in 2016 under the Combined PXF Facility in the total amount of USD524 million, utilizing USD415 million of available commitments under the new refinancing tranches as well as USD109 million of the Company’s own funds. The Company’s obligation to repay the scheduled instalments under the Combined PXF Facility for the year 2016 has been discharged in full.
Commenting on the first quarter 2016 results, Vladislav Soloviev, CEO of RUSAL, said:
“During the first quarter of 2016 amid turbulent commodity markets, RUSAL’s continued focus was on tighter cost controls and operational efficiency. During the reporting period, the Company reduced its aluminium cash cost per tonne to USD1,326.
“Post quarter end, RUSAL reached new agreements with its lenders and fully executed its obligations to repay scheduled installments under the Combined PXF Facility in 2016. This refinancing represents a substantial move for the Company’s debt profile. Further deleveraging remains a priority for RUSAL in order to support our financial position.
“Positive dynamics witnessed in the aluminium sector are supported by an accelerating ex-China deficit and solid demand fundamentals as the transportation sector continues to fuel global demand growth in primary aluminium.”
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