UC RUSAL Announces Full Year Results for 2013
OREANDA-NEWS. UC RUSAL (SEHK: 486, Euronext: RUSAL/RUAL, Moscow Exchange: RUALR/RUALRS), a leading, global aluminium producer, announces its results for the year ended 31 December 2013.
Key highlights
Low LME aluminium price driven by the negative investor sentiment exerted further pressure on the aluminium industry throughout the year ended 31 December 2013. Average LME aluminium price decreased by 8.6% from USD2,018 per tonne for the year ended 31 December 2012 to USD1,845 per tonne for the same period of 2013. However, thanks to cost reduction measures, working capital optimization and ongoing rationalization programme undertaken by the management supported by product mix improvement, weakened local currency and continuously growing premiums, UC RUSAL demonstrated Aluminium segment EBITDA margin of 11.3%.
Aluminium segment cost per tonne reduced to USD1,907 per tonne (by 2.0%) in 2013 as compared to USD1,946 in 2012 resulting from efficiency initiatives supported by depreciation of the Russian Rouble. Aluminium segment cost per tonne in the fourth quarter of 2013 achieved record low USD1,864 per tonne as compared to USD1,934 for the fourth quarter of 2012.
Primary aluminium production decreased by 7.6% or by 316 thousand tonnes to 3,857 thousand tonnes for the year ended 31 December 2013 as compared to 4,173 thousand tonnes for the preceding year as a result of the Company's expansion of inefficient capacity curtailment programme. Total aluminium output in the fourth quarter of 2013 decreased by 12.9% or by 134 thousand tonnes to 904 thousand tonnes compared to 1,038 thousand tonnes in the fourth quarter of 2012.
Share of value-added products output comprised a record 42% of total aluminium production in comparison with 39% for the previous year.
Revenue decreased by USD1,131 million or 10.4% to USD9,760 million in 2013 compared to USD10,891 million in 2012 following the drop in LME aluminium prices coupled with the 9.9% reduction on sales volumes. The decrease was partially offset with historically high average realized premiums of USD271 per tonne.
The Company maintained a robust cash position with USD1,386 million of free cash flow[1] generated for the year ended 31 December 2013 and a reduction in working capital by 15.8% primarily due to the capacity curtailment measures.
Loss for the year ended 31 December 2013 amounted to USD3,222 million resulting primarily from the impairment and one-off restructuring charges of USD1,919 million in respect of goodwill and certain non-current assets.
The Company decreased its net debt by USD720 million or 6.6% as at 31 December 2013 as compared to the beginning of the year.
During the period, UC RUSAL successfully completed the sale of 3,873,537 shares of Norilsk Nickel to Crispian Investments Limited for a consideration of approximately USD620 million. The net proceeds of the sale were utilised as partial prepayment of debt owing to Sberbank. In September 2013, a new dividend policy of Norilsk Nickel was agreed by the shareholders of Norilsk Nickel, which will provide UC RUSAL with a stable dividend flow up to 2017 and beyond.
Commenting on the full year results, Oleg Deripaska, CEO of RUSAL said:
“2013 was another challenging year for the aluminium industry, which, despite consumption growth of 6% to 51.7 million tonnes, saw negative investor sentiment continue to weigh on LME prices which fell by 8.6%, to USD 1,845 per tonne - a level which takes an ever greater share of global production capacity to or below break-even level. In the second half of the year, the all-in price of aluminium was also influenced by the LME's proposed warehouse policy changes, which added further to the market uncertainty and negatively affected market premiums.
RUSAL has continued to implement a disciplined focus on maintaining operational efficiencies and cost controls in order to counter these conditions. In line with its stated strategy, the Company has suspended aluminium production at its least-efficient smelting facilities, resulting in a 7.6% decrease in metal output year-on-year. Whilst the Company has already begun to see the results of these efficiencies, their main effect is expected in the current year as RUSAL's results in 2013 include operations at these non-efficient facilities, and their associated mothballing costs. RUSAL's loss for the year reached USD3.2 billion, with the majority of this figure represented by impairment and restructuring charges of approximately USD2 billion relating to a non-cash write-down of goodwill and impairment of certain non-current assets, including for the Taishet smelter project which is currently on hold due to the unfavourable market environment, as well as to the capacity optimization programme.
Having gone through a difficult, but important transformation, the Company now has the lowest level of cash cost per tonne of USD1,864 (in Q4 2013) in recent years and is continuing to focus on higher margin value added products in its portfolio. UC RUSAL estimates that global demand for aluminium will demonstrate resilient growth, with a 6% annual growth forecast, from 2014 to 2015 backed by clear signs of a strengthening global economy. A growing deficit in the market in the years ahead will help unwind stocks and allow the industry to become more fit and healthy for a new period of growth.”
Комментарии