Rusal earnings fall by 84pc as metal takes hit
RUSAL, the world’s biggest aluminium producer, yesterday posted an 84 per cent drop in first-quarter net profit as metal prices fell.
Net profit, which included its share of earnings in Norilsk and non-cash items, slumped to $74m (£46m) in the three months ended March from $451m a year earlier.
While global aluminium consumption in the first quarter grew five per cent from a year earlier, the average price of the metal used in cars, construction and beverage cans fell 13 per cent to $2,177 per tonne. Rusal said it was considering cutting back on its smeltering capacity as a result of weaker markets.
Chief executive and controlling shareholder Oleg Deripaska has resisted pressure to dispose of Rusal’s 25 per cent share in Norilsk Nickel, which specialises in Nickel and the precious metal palladium.
A disposal could help make the company’s debt pile more manageable, some analysts have said.
Deripaska’s plans for a merger with the company were dashed when the global crisis struck.
He said yesterday: “Even though near-term market prospects are still rather clouded, there are positive signals, with aluminium consumption growth in the US, strengthening of auto sales in Germany, and a strong rise in aluminium consumption in Japan, as well as high level of premiums, that allow us to look optimistically into the future.
“The first quarter of 2012 has proved to be a tough test for the aluminium industry with the global demand for the metal slowing down and the aluminium price weakening.”
Adjusted earnings before interest, tax, depreciation and amortization (Ebitda) dropped 38 per cent to $237m, compared with an average forecast of $257m pencilled in by analysts.
Meanwhile Rusal also nominated Matthias Warnig, a former East German secret service officer who has known president Vladimir Putin since the 1990s, as an independent director of the firm.