UC Rusal Announces 2011 First Quarter Results

OREANDA-NEWS. May 12, 2011. UC RUSAL (SEHK: 486, EuroNext: RUSAL/RUAL, MICEX: RUALR, RTS: RUAL), the world's largest aluminium producer, announces its results for the three months ended 31 March 2011.

Key highlights

•           Revenue increased by 28.4% to USD2,993 million as a result of higher aluminium and alumina market prices, as well as improved product mix and realised premiums over LME price.

•           Adjusted EBITDA increased by 40.6% to USD682 million due to increased weighted-average realised prices and sales volumes.

•           Net profit of USD746 million for the three months ended 31 March 2011 compared to net profit of USD247 million for the three months ended 31 March 2010.

•           Total aluminium output amounted to 1,014 thousand tonnes for the three months ended 31 March 2011, an increase of 4.2% as compared to the three months ended 31 March 2010.

•           Alumina output totaled 1,996 thousand tonnes for the three months ended 31 March 2011, an increase of 9.5% as compared to the three months ended 31 March 2010.

•           Bauxite production totaled 3,139 thousand tonnes for the three months ended 31 March 2011 and increased by 20.1% as compared to the three months ended 31 March 2010.

•           In the first three months ended 31 March 2011, the Company reduced its obligations under the debt restructuring agreements by USD860 million including a repayment of USD530 million out of the proceeds from the Russian ruble denominated bonds issue in March 2011.

•           Reduction of Total Net Debt resulted in a decrease in the Company's Leverage ratio below 4:1 that would lead to a decrease in interest margin.

Commenting on the first quarter results, Oleg Deripaska, CEO of RUSAL said:

"The first quarter of 2011 was a difficult one for aluminium producers, and our financial results reflect the current situation in the global aluminium industry and in the Russian economy. On the one hand, high inflation has had a negative impact on all aluminium producers, with UC RUSAL coming under particular pressure due to the sharp rise in energy tariffs in Russia in the first quarter of 2011. The company is taking a number of steps to mitigate the impact of escalating tariffs through the negotiating of new long-term electricity supply contracts, and the development of our own energy base. At the same time we continued to work to increase the efficiency of our business, which enabled us to keep the cost of sales at the level of the fourth quarter of last year.

"On the other hand, the increasing demand for aluminium, supported by a return to pre-crisis rates of growth of the global economy, has seen a steady growth of aluminum prices, which in the first quarter exceeded our expectations. In this regard, we have revised our forecast and now expect that the average price for aluminium in 2011 will be above USD2,700 per tonne. UC RUSAL is well positioned to take advantage of the strengthening price of aluminium by increasing production and launching new facilities, such as the Boguchansky and Taishet aluminium smelters.

"UC RUSAL has a solid foundation in place, as well as a favorable situation in global markets, due to growth of the economically active population, urbanisation and the increased use of aluminium as the metal of choice in the transport sector due to its unique characteristics, create good conditions for the growth of the Company's value in the interest of all shareholders."