EN+ Group warns full brunt of US sanctions is yet to take effect
EN+ GROUP has warned that its rising profits are yet to take the full brunt of US sanctions against the Russian energy-to-aluminium producer.
The Siberian-based business, set up by blacklisted billionaire Oleg Deripaska, revealed its net profits for the first nine months of the year climbed by over 80pc to $1.62bn (£1.26bn).
However, tougher times are ahead for the London-listed group, which warned investors it is “highly likely” that the impact of US sanctions “may be materially adverse to the business”.
The warning emerged as Russian media reported a $40m boost for sanc- tions-hit companies linked to Mr Deripaska, who is understood to maintain close ties to Russian president Vladimir Putin. Kremlin officials have reportedly agreed to pay $30m for 600 National Guard vehicles from Mr Deripaska’s manufacturer Gaz PAO.
Another $10m will be spent on buying 1,500 natural-gas cars from firms belonging to Gaz for Russia’s industry ministry.
A statement from the Russian government said the deals “will allow an increase in production capacity among sanctioned companies and address national security challenges.”
EN+ has continued to grow its aluminium and energy activities following its listing on the London Stock Exchange a year ago. The group’s total electricity production grew by 5.6pc to 53.2TWH for the first nine months of the year, including an increase in hydro power output of 3.1pc.
EN+ added that its aluminium production increased by 1.7pc to 2.8 million tonnes. The owner of Russian aluminium giant Rusal is under fierce pressure from US authorities to comply with a rigorous compliance plan spearheaded by EN+ chairman Lord Barker.
Lord Barker accepted the chairmanship in October last year ahead of the market float which valued EN+ Group at $7bn and raised hackles among British security sources. He later brushed off calls to abandon the position in the wake of the US sanctions, reportedly to represent the interests of City shareholders.
Under the terms of the “Barker Plan”, announced in April, Mr Deripaska handed the reins of the company to Vladimir Kiriukhin effective from Nov 1. He has also sold off almost half of his 70pc stake in the business.
Mr Deripaska was one of 24 leading business and political officials chosen by the US to face the brunt of its financial clampdown on Russia. US officials have extended the deadline for him to reduce his holdings in EN+, Rusal and Gaz PAO until the first week of January.