Rusal Reports Decline in Profits Amidst Global Market Shifts

Rusal Reports Decline in Profits Amidst Global Market Shifts

Financial Decline:

Rusal, a key player in the global aluminum market, has reported a stark decrease in both revenue and net profit for the January to September period of 2023. The revenue fell to approximately 836 million rubles ($9.2 million USD), a substantial drop from the previous year’s 71.31 billion rubles ($785.41 million USD). Net profit also experienced a dramatic reduction to 2.47 billion rubles ($27.17 million USD), down from last year’s 71.52 billion rubles ($787.72 million USD).

Company Capitalization:

The statutory capital of Rusal remains at 9.97 billion rubles ($109.67 million USD), with an undistributed profit reported at 257 billion rubles ($2.83 billion USD).

Strategic Shipping Terminal:

Rusal is redirecting its logistical strategies to better align with market opportunities, particularly by constructing a port terminal in the Russian Far East, intended to facilitate the movement of up to 1.5 million tonnes annually. The project is expected to have a financial footprint of around 12 billion rubles ($132 million USD) and may take three years to complete.

International Expansion:

In a move to secure its supply chain, Rusal has acquired a 30% stake in the Chinese steelmaker Hebei Wenfeng New Materials for a sum equivalent to 267 million rubles ($2.94 million USD).

Navigating Sanctions:

Rusal has been circumventing the loss of approximately 4 million tonnes per annum of alumina supplies, post-sanctions. Despite no direct sanctions on Rusal itself, its owner, Oleg Deripaska, has faced sanctions from the EU and UK in 2022.

China’s Rising Production:

In the backdrop of China’s rapid aluminum capacity expansion, which saw more than 10 million tonnes added in 2022, Rusal is adjusting its global strategy. The firm accounts for 5.6% of the world’s aluminum production and 4.5% in alumina.

Diversified Alumina Imports:

To combat supply chain hurdles, Rusal has diversified its alumina sources, increasing imports from India and Kazakhstan, as China’s internal demand surges due to its growing aluminum production capacity.

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