Rusal’s quarterly report has shown extremely disappointing figures. According to official figures, over the three reporting months EBITDA has fallen 65% on an annualized basis to $ 237 million. The quarterly revenue of the Russian company has decreased by 15% amounting to 2.47 billion US dollars.
This serious deterioration is due to the fact that the aluminum price has fallen on the London Metal Exchange to $ 1,761 per ton. Last time the market watched such a low metal price at the end of 2016. For the year, the premium to the LME price has also decreased to $ 145 per ton (a year earlier, the figure was $ 167).
It should be noted that over the quarter, the cost of the resource production has decreased to $ 1,612 per ton (this is 3.7% lower than the same indicator in the previous reporting period). But this positive fact hasn’t improved the company’s reporting.
For the nine months of 2019, the revenue of the Russian aluminum giant has lost 9% and fell to $ 7.22 billion. Over the same period, adjusted EBITDA has dropped 57.5% – to $ 765 million.
For the quarter, normalized earnings have decreased by 61.5% – to $ 240 million, for 9 months – by 43%, to $ 906 million.
Rusal ‘s experts believe that the trade war between the States and China, which caused a global slowdown in production rates, has negatively affected metal prices. They expect that the increase in the automotive market of the EU and South America will positively affect the price of aluminum. In addition, lower interest rates in the Russian Federation should stimulate the demand.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group