OREANDA-NEWS. UC RUSAL (SEHK: 486, Euronext: RUSAL/RUAL, Moscow Exchange: RUALR/RUALRS), a leading, global aluminium producer, announces its results for the three and nine months ended 30 September 2013.

Key highlights of the quarter ended 30 September 2013

In the third quarter of 2013, the situation in the aluminium industry has remained particularly challenging. However, the Company has managed to withstand the LME aluminium price reaching its lowest level since the second quarter of 2009 and reduce its net loss as compared to the previous quarter of the year thanks to measures aimed at improving business efficiency among other factors.

Total aluminium output amounted to 954 thousand tonnes in the third quarter of 2013, representing a decrease of 3.8% as compared to 992 thousand tonnes for the previous quarter of the year and a decrease of 8.4% as compared to 1,042 thousand tonnes in the third quarter of 2012 as a result of the mothballed production at the least efficient European smelters in line with the ongoing capacity curtailment program.

As a result of this programme, aluminium segment cost per tonne decreased by 2.0% to USD1,872 in the third quarter of 2013 in comparison with USD1,911 per tonne for the preceding quarter hitting new low since the end of 2010 supported by the depreciation of the Russian Rouble to the US dollar by 3.5% to RUB32.8 in the third quarter of 2013 from RUB31.7 for the previous quarter of the year. These factors allowed the Company to provide sound segment EBITDA margin of 9.8% in line with the industry best producers.

As a result the Company generated the Adjusted EBITDA of USD130 million in the third quarter of 2013, the same as for the respective period of the prior year, despite the 5.9% decrease in the aluminium sales volumes and 7.1% decline in LME aluminium price for the comparable periods.

The Company reduced its Recurring Net Loss to USD132 million for the third quarter of 2013 from USD208 million for the preceding quarter despite the decrease in the LME aluminium price by 2.9%, from USD 1,835 to USD1,781 for the respective periods.

On 1 October, 2013 UC RUSAL Board of Directors announced the amendments to the initial Agreement with Norilsk Nickel, that guarantee stable dividends from Norilsk Nickel ensuring additional cushion for UC RUSAL.

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

“Under pressure from a continued decline in LME aluminium prices, in the third quarter of 2013, the Company has continued to implement its inefficient capacity mothballing programme and has continued to focus further on cost controls. To ensure business efficiency, RUSAL temporarily ceased aluminium production at the Volgograd, Volkhov and Urals aluminium smelters and at the first phase of the Novokuznetsk aluminium smelter as well as certain potrooms of the Bogoslovsk and Nadvoitsy aluminium smelters. Production volumes have been also reduced at other production facilities.

As a result of these measures and also thanks to a move away from high cost supplies and optimization of raw materials mix, RUSAL has reached a nearly 3-year low cash cost within the aluminium segment and also achieved a sound segment EBITDA margin of 9.8%. Importantly, the Company has reduced its recurring net loss in the third quarter 2013 to USD132 million as compared to the previous quarter, and also improved other financial results. However, conditions within the aluminium market remain challenging, and there is still a long way to go before we see a marked improvement.

According to RUSAL's estimates, global demand for aluminium will continue to grow, improving by 6% per annum from 2013 through 2015. In the fourth quarter this year, the Western aluminium market is expected to move to a production balance deficit, however the situation is aggravated due to high stock levels and the continued slow pace of curtailments of inefficient capacity by our partners - international aluminium producers.”