Rusal quarterly profit surges versus year-ago earnings despite US sanctions

HONG KONG: Russian aluminium giant Rusal posted a second-quarter profit of US$440mil amid higher market prices for the metal, remaining well in the black despite sanctions imposed on the company earlier this year by Washington.

Recurring net profit at Hong Kong-listed Rusal was up 75% from a year ago, but down 17% from the first quarter of 2018. The earnings figures were the first to be released since sanctions were imposed in early April.

Its net profit was bolstered by an 18% rise in the LME aluminium price over the period, while Rusal’s aluminium and alloys sales fell 22% year-on-year to 783,000 tonnes.

The US Treasury imposed sanctions against billionaire Oleg Deripaska and eight companies in which he is a large shareholder, including aluminum exporter Rusal, in response to what it termed “malign activities” by Russia.

The sanctions, the toughest since Moscow’s 2014 annexation of Crimea, roiled aluminum markets and were later watered down.

The Treasury Department has since warmed to the idea of removing Rusal from the list altogether.

In July, Washington extended a delay for investors to divest holdings in Rusal and some other companies from Aug 5 to Oct 23, saying it was in talks with Deripaska on how he could cede his control of the company and try to remove it from the sanctions list.

“The sanctions had a tangible impact on the company’s export activities, logistics, and operations in the financial market,” said a Rusal representative.

“The uncertainty generated by the US sanctions remains a major risk for Rusal and the company continues to manage this situation.” — Reuters