OREANDA-NEWS. UC RUSAL (SEHK: 486, Euronext: RUSAL/RUAL, Moscow Exchange: RUALR/RUALRS), a leading, global aluminium producer, announces its results for the three months ended 31 March 2013.

Key highlights

• Primary aluminium production in the first quarter of 2013 decreased by 4.0% (or by 42 thousand tonnes) to 1,007 thousand tonnes compared to the first quarter of 2012 or by 3.0% (or by 31 thousand tonnes) compared to the fourth quarter of 2012 reflecting the launch of capacity curtailments program and was mostly attributable to the decreased production at certain less efficient smelters located in European part of Russia and Urals.

• Share of value-added products output increased to 40% of total aluminium production in comparison with 37% for the first quarter or with 39% for the fourth quarter of the previous year.

• Revenue in the first quarter of 2013 increased to USD2,682 million (by 2.2%) as compared to USD2,624 million for the fourth quarter of 2012 due to historically high premiums over LME aluminium price of USD264 per tonne and improvement of the product mix offsetting a 1.7% decrease in physical aluminium sales while the metal price on LME was almost flat as compared with the last quarter of the preceding year.

• Aluminium segment cost per tonne in the first quarter of 2013 increased by 1.9% to USD1,971 per tonne as compared to USD1,934 per tonne in the fourth quarter of 2012 (and was flat as compared with the level of the first quarter of 2012) following 2.3% Russian Ruble appreciation.

• Adjusted EBITDA comprised USD246 million for the first quarter of 2013 with a margin of 9.2% demonstrating an increase of 11.3% as compared to the fourth quarter of 2012 in line with the industry best producers reflecting stronger revenue and lower operating expenses despite negative effect from appreciating local currency. Aluminium segment EBITDA margin improved to 14.3% in the first quarter of 2013 as compared to 12.7% for the last quarter of 2012.

• In the first quarter of 2013 the Company made repayments to international and Russian lenders in the amount of USD483 million. In April 2013 the Company completed the sale of Norilsk Nickel shares to Millhouse according to the shareholder agreement signed in December 2012. The net proceeds in the total amount of USD620 million were applied towards the prepayment of debt owed to Sberbank.

• The Company is on track with its BEMO project. BEMO HPP started hydropower capacity sales to the free market from March 1st, 2013. BEMO smelter’s first metal is expected to be produced in the third quarter of 2013.

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

“Despite continued weakness in global aluminium prices and unfavorable market developments, RUSAL delivered a set of improved quarter-on-quarter financial results in the first three months of 2013. Our top-line increased to USD2,682 million, up 2.2% from the fourth quarter last year, while EBITDA grew by 11.3% to USD246 million in the same period reflecting record-high realized premiums and further improvements to our product portfolio. This solid set of results came in spite of a drop in RUSAL’s aluminium output by 42 thousand tonnes in the first quarter, or approximately by 150 thousand tonnes on an annualized basis, following the Company’s responsible approach to production cuts.

“The rationalization of production and a desire to help reach the balance of supply and demand, remain at the forefront of RUSAL’s business development plans, as a leading aluminium producer. As such, the Board announced its decision in the period to further reduce annual production volume and exports by 300 thousand tonnes from the last year’s level and maintain it at this level for the next three years. Our long-term rebalancing strategy taking place in the Western part of our Russian least efficient operations remains on track. We believe this approach needs to be adopted across the whole industry, to move it away from its present unsustainable position characterized by excessive warehouse stocks.

“Looking beyond the first quarter, the Company is pleased to report that, following the Norilsk Nickel’s shareholders’ agreement, in April first debt prepayments were made utilizing the respective proceeds from the deal. Going forward, RUSAL’s investment in Norilsk Nickel will continue to bring significant returns and provide strong support for the Company’s deleveraging.

“While industry conditions as well as the wider macroeconomic environment remain volatile, RUSAL maintains its 6% consumption growth outlook for 2013 with strong demand expected in the US and in particular Asia as a result of growth in the aerospace, automotive and electrical sectors. RUSAL also believes there to be significant opportunities across the Russian and CIS markets and will work towards enhancing the aluminium consumption in the region and increasing domestic sales.”