Rusal Proves there is Life After US Sanctions
Shares in Russian aluminium giant Rusal surged Monday after the company posted a second-quarter profit, bolstered by higher metal prices despite US sanctions imposed earlier this year.
The results were the first to be posted since Washington announced the April sanctions.
The company is listed on the Hong Kong exchange, where shares closed up 4.5 percent at HK$2.30 ($0.29).
The company posted an adjusted net income of $218 million for the three months to the end of June, up from 202 million in the same period the previous year but down 31 percent from January-March this year.
Recurring net profit for the second quarter was up 75 percent year-on-year at $440 million.
The US Treasury’s Office of Foreign Assets Control (OFAC) announced fresh sanctions against Russia in April following a diplomatic crisis sparked by the poisoning in Britain of former double agent Sergei Skripal.
The sanctions hit oligarchs close to President Vladimir Putin including Rusal founder Oleg Deripaska, who resigned his seat on the board in May as the company worked to escape US sanctions.
Rusal warned that despite Monday’s positive results, the sanctions still put the firm at risk.
“Whilst further evaluation is being carried out by the Company to assess the impact of the OFAC Sanctions on the Group, the Company’s current assessment still remains the same, that it is highly likely that the impact may be materially adverse to the business,” it said in a statement Monday.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the April-June quarter rose eight per cent to $552 million compared to the same period last year.
Revenue dropped year-on-year from $2.47 billion to $2.25 billion in the second quarter.
Claims that Stories by Bloomberg and Reuters news agencies regarding Russian aluminum producer RUSAL, do not correspond with reality and are based on “dubious” sources, have proven to be correct.
According to its statement posted on Facebook some “amateurish comments of anonymous sources” which “do not reflect reality,” are used in the two agencies’ articles about the sanctioned Russian firm. RUSAL’s statement did not specify the actual articles but said such speculation is damaging the company’s business reputation.
The publications give the wrong impression about what is happening at a time when “the company is in a difficult situation and has concentrated all of its resources on finding optimal solutions in order to meet the interests of customers, employees, investors and creditors,” the statement read. In the current situation, the company “reserves the right to use all legal measures to protect its reputation,” RUSAL stressed.