Rusal first-quarter profit triples as price of aluminium soars
Daniel Ren in Shanghai
Rusal, the world's largest aluminium maker, says its first-quarter net profit more than tripled from a year ago, benefiting from higher product prices.
The Moscow-based company, which made a debut on the Hong Kong stock exchange in January last year, reported a net profit of US$746 million, compared to US$247 million a year ago. Revenue jumped 28.4 per cent to US$2.99 billion.
Excluding its one-off gain of US$298 million due to the revaluation of derivative financial instruments as a result of a spike in commodity prices, its profit in the first three months of this year was valued at US$448 million, a year-on-year increase of 81.4 per cent.
'The increasing demand for aluminium, supported by a return to pre-crisis rates of growth of the global economy, has seen a steady growth of aluminium prices, which, in the first quarter, exceeded our expectations,' said chief executive Oleg Deripaska, adding that Rusal would increase production and launch new facilities.
Rusal expects the average price of aluminium to top US$2,700 per tonne this year. It predicts the price to range from US$2,500 to US$2,600.
In the first quarter, Rusal's total aluminium output increased 4.2 per cent to 1.01 million tonnes. The company projects a 13 per cent growth of global demand for aluminium this year - to 46 million tonnes - driven by emerging markets including China, Brazil, India and Russia. Demand in China is expected to reach 19 million tonnes this year, a 15 per cent rise from a year ago, Rusal said.
'The transportation industry remains the key growth driver in China, with additional support from continuing urbanisation, infrastructure development and realisation of development projects,' the company said. 'Managing the transition of major economic activity from 'investment driven' to 'consumption driven' remains one of the key challenges of the government during 2011.'