RUSAL announces results for Q3 ended 30 September 2011

RUSAL, the world's largest aluminium producer, announces its results for the third quarter ended 30 September 2011.

Key highlights

Revenue increased by 16.8% to USD3,162 million for the three months ended 30 September 2011, as compared to USD2,708 million for the same period of 2010, mainly due to an increase in sales prices and a record level of realised premiums of USD164 per tonne over the LME aluminium price.
Adjusted EBITDA increased by 25.0% to USD705 million for the three months ended 30 September 2011 as compared to USD564 million for the three months ended 30 September 2010. Adjusted EBITDA margin was 22.3% and 20.8% for the three months ended 30 September 2011 and 2010, respectively, maintaining its premier position in the industry.
Adjusted Net Profit for the three months ended 30 September 2011 increased more than twice to USD290 million as compared to USD143 million for the three months ended 30 September 2010 following the strong operating results.
Net profit was USD432 million for the three months ended 30 September 2011 as compared to USD29 million for the three months ended 30 September 2010.
Continuing decrease of the average-weighted energy tariff (a drop by 6% in the third quarter of 2011 as compared to that of the second quarter of 2011).
Completed refinancing of the debt portfolio with maturity extension and interest margin reduction which allowed for operational and financial flexibility, dividend payments and the lifting of capex restrictions.
BEMO project well on track with all nine turbines delivered on site and five of them installed.
RUB40 billion 15-year non-recourse project financing for Taishet aluminium smelter arranged and capital spending restarted in the third quarter of 2011.

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

"Market uncertainty and anticipation of another global economic downturn have put significant pressure on the aluminium industry in the third quarter of 2011. Despite the volatile metal prices, UC RUSAL has nevertheless

achieved impressive results during the period. Solid production results, enhanced cost efficiency and clientoriented marketing efforts, coupled with a focus on value-added products, have enabled us to end the period with adjusted EBITDA increasing by 25.0% and adjusted net profit more than doubling period-on-period. UC RUSAL has maintained its leading position in industry with an adjusted EBITDA margin of 22.3%.

"The third quarter has seen UC RUSAL reinforce its financial position after a successful refinancing of its debt, a move supported by major international and Russian blue chip lenders. This step gives the Company more flexibility in terms of capital expenditure and development of a new long-term growth strategy with completion of the Boguchansky and Taishet smelters at its forefront.

"Current volatility and falling LME prices have led to a tangible imbalance between the physical and equity market. Major indicators show that the physical market remains tight with premiums staying at their five-year high levels. This supports our view that prices for aluminium, unlike prices for other commodities amid the current economic conditions, have reached the break-even point. In the mid to long term, demand for our metal is to remain strong, and despite the current challenging economic conditions, UC RUSAL believes the progress it made together with the continuing focus on cost efficiency will enable the Company to continue delivering value for all its stakeholders."