Aluminium giant Rusal has grown first half profit, despite being hit with sanctions by the US over its ties with Russian oligarch Oleg Deripaska. The figures Second quarter revenues fell from $2.46bn to $2.25bn, while gross profit slipped from $677m to $671m. However adjusted EBITDA rose from $510m to $552m, with adjusted net profit climbing from $202m to $218m. Net profit was bolstered by an 18 percent rise in the LME aluminium price over the period, while Rusal’s aluminium and alloys sales fell 22 per cent year-on-year to 783,000 tonnes. Why it's interesting The earnings figures were the first to be released since sanctions were imposed in early April as Washington sought to hit back at the Kremlin following its alleged meddling in elections, cyberattacks, and military actions in Ukraine and Syria. However they have since been watered down and the Treasury Department has since hinted at 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 5 August to 23 October, 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. What Rusal said "Trade wars and imposed import duties, together with the Ofac Sanctions, have caused significant growth of premiums and prices increasing total costs incurred by consumers of aluminium," the firm said today. "Rusal supplies significant volumes of alumina to EU smelters. Consequently Ofac Sanctions against Rusal, coupled with Alunorte outage, have caused a surge in alumina prices in April, pushing price level close to USD600/t. This in turn led to significant cost pressure on non-integrated smelters, when alumina price has approached the point of 21 per cent of LME aluminium price against historical average of 14-15 per cent... "Aluminium prices and premiums continue to be volatile as key supply and LME trading disruption issues, as well as lack of liquidity and LME suspension of Rusal’s brands are still in place and global aluminium deficit continue growing." |