Russian metals giant UC Rusal said yesterday it swung back into the black last year following its debt restructuring, reporting a net profit of US$821 million.
Rusal, the first Russian company to list on the Hong Kong Stock Exchange, said last year was “one of the toughest” years on record for the aluminum industry. It reported a net loss of US$5.98 billion in 2008.
The world’s largest aluminium producer returned to profit despite revenue plunging 48 percent to US$8.17 billion as demand and prices for aluminum slid during the global economic crisis.
The result was also higher than the average profit forecast of US$474.5 million by six analysts surveyed by Dow Jones Newswires.
Chairman and chief executive Oleg Deripaska said last year was “one of the toughest on record for the global economy, commodity markets in general and, in particular, the aluminum industry.”
“We took decisive action to counter the adverse effects of the downturn by significantly reducing costs and reshaping the company to leave it better placed to benefit from the upturn,” he said in the company’s first earnings report in Hong Kong since its dual listings in the territory and Paris in January.
Rusal shares have performed poorly since they were floated on the Hong Kong bourse, but the company said the listing would drive its value forward, highlighting China as the fastest-growing consumption market for aluminum.
“We are very positive of Rusal’s ability to deliver to our shareholders. We will benefit from our proximity to the Chinese market,” Deripaska told a press conference.
Artem Volynets, a deputy chief executive of Rusal, told the press conference the company estimated that 30 percent of its aluminum sales would go to Asia this year, a big jump from 20 percent last year.
He said China “is certainly the largest and the fastest-growing market for the metal” because of its urbanization, increased spending on infrastructure projects and huge demand for automobiles.
The company said it would also invest in low-cost energy, restart operations and investing in greenfield projects.
Deripaska is also looking to list En+ Power — part of his energy holding — in Hong Kong to raise up to US$2 billion, a banking source said.
Asked about the listing plan, Deripaska said: “We will issue an announcement later.”
He declined to give further details.
Before its listing, the city’s bourse operator, Hong Kong Exchanges and Clearing, repeatedly delayed its approval Rusal’s IPO plans until after the company said it had successfully restructured its US$16.6 billion debt and other obligations with more than 70 banks.
There were also corporate governance issues swirling around Deripaska, once Russia’s richest man before metals prices plummeted last year. The billionaire oligarch has dismissed allegations that he is linked to organized crime.
In a highly unusual move, Hong Kong’s market watchdog Securities and Futures Commission effectively barred retail investors from buying Rusal shares by mandating a minimum investment of about US$130,000.
The Hong Kong bourse has been eager to attract non-Chinese businesses to list in the city, in the face of stiff competition from London and Shanghai.
It hopes that more Russian companies would follow suit after Rusal’s debut.
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