United Company RUSAL Plc: Third Quarter 2015 Trading Update

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UNITED COMPANY RUSAL PLC (Paris:RUSAL) (Paris:RUAL)
(Incorporated under the laws of Jersey with limited liability)
(Stock Code: 486)

THIRD QUARTER 2015 TRADING UPDATE

This announcement is made by United Company RUSAL Plc (“UC RUSAL” or the “Company”) pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and applicable French laws and regulations.

Shareholders and potential investors are advised to exercise caution when dealing in the shares of UC RUSAL.

UC RUSAL announces its operating results for third quarter 2015 (“3Q15”).

Aluminium

▪ Aluminium production1 in 3Q15 totaled 916 thousand tons (+1.0% QoQ). The capacities utilisation rate was approximately 96%2. Russia Siberian operations accounted for 95% of the total aluminium products output.

▪ Aluminium sales3 in 3Q15 totaled 939 thousand tons (+5.7% QoQ). Sales growth was driven by the increased sales to both the domestic and export markets. Export deliveries in 3Q15 were partially supported by the reduction of inventories held during transportation. The share of VAP4 products in the overall aluminium sales portfolio in 3Q15 increased to 46%.

1 Aluminium production represented by salable products output.

2 Excluding mothballed capacities. Bogoslovsk, Urals, Volgograd, Volkhov and ALSCON plants are not included in the total Group capacity.

3 Sales volumes and realized sales price based on preliminary data and will be updated in 3Q15 financial results announcement expected to be issued on 13 November 2015.

4 VAP includes alloyed ingots, slabs, billets and wire rod.

▪ 3Q15 realized price decreased by 13.0% QoQ to US$1,843/t following the reduction of aluminium prices at London Metal Exchange and commodity premiums, impacted by deteriorating market conditions.

▪ 9M15 aluminium production totaled 2,724 thousand tons (+1.4% YoY). The utilisation rate was approximately 95%.

▪ 9M15 aluminium sales totaled 2,762 thousand tons (+4.2% YoY), with 43% share of VAP in the sales portfolio. Average realised price in 9M15 was at US$2,087/t (-3.1% YoY).

Alumina

▪ 3Q15 alumina production totaled 1,870 thousand tons (+2.8% QoQ). International operations (including Aughinish Alumina and Windalco) accounted for the major part of the output growth due to routine maintenance repairs performed at those plants in 2Q15. The overall alumina production growth is attributable to stronger internal (intercompany) demand and sustainable demand from third parties.

▪ 9M15 alumina production totaled 5,496 thousand tons (+1.1% YoY).

Bauxites

▪ 3Q15 bauxite and nepheline ores production totaled 3,488 thousand tons (+8.2% QoQ) and 1,053 thousand tons (+1.2% QoQ), respectively. Russian operations accounted for 50% of bauxite produced and 100% of nepheline ore produced. The overall bauxite production growth is attributable to stronger internal (intercompany) and external demand.

▪ 9M15 bauxite and nepheline ores production totaled 9,834 thousand tons (+7.2% YoY) and 3,159 thousand tons, respectively (-6.6% YoY).

Guidance

▪ The Company will maintain production discipline in accordance with the previously provided guidance. UC RUSAL management expects flat YoY aluminium production volumes in 2015.

▪ The Company does not plan restarting of aluminium smelters idled in 2013 and is considering further aluminium capacities production cuts totaling approximately 200 thousand tons per annum.

KEY OPERATING DATA

GROUP PRODUCTION DATA5

(‘000 tons)   3Q15   2Q15  

Change,
%(QoQ)

  9M15   9M14  

Change,
%(YoY)

 
Aluminium 916 908 1.0% 2,724 2,686 1.4%
Aluminium foil and packaging products 22 22 -0.4% 67 69 -3.3%
Alumina 1,870 1,818 2.8% 5,496 5,435 1.1%
Bauxite 3,488 3,223 8.2% 9,834 9,176 7.2%
Nepheline 1,053 1,040 1.2% 3,159 3,384 -6.6%

GROUP SALES DATA

(‘000 tons), unless otherwise indicated   3Q15   2Q15  

Change,
%(QoQ)

  9M15   9M14  

Change,
%(YoY)

 
Aluminium sales 939 888 5.7% 2,762 2,651 4.2%
Share of VAP 46% 44% 43% 46%
Aluminium realised price, USD/t 1,843 2,119 -13.0% 2,087 2,154 -3.1%

5 The production data throughout the report is presented on equity-adjusted basis. Production volumes are calculated based on the pro rata share of the Company´s (and its subsidiaries´) ownership in corresponding alumina refineries.

ALUMINIUM PRODUCTION

(‘000 tons)   Interest   3Q15   2Q15  

Change,
%(QoQ)

  9M15   9M14  

Change,
%(YoY)

 
Russia (Siberia)
Bratsk aluminium smelter 100% 252 251 0.6% 751 752 -0.1%
Krasnoyarsk aluminium smelter 100% 255 251 1.4% 755 751 0.7%
Sayanogorsk aluminium smelter 100% 132 131 0.6% 395 381 3.5%
Novokuznetsk aluminium smelter 100% 53 52 2.3% 156 155 0.5%
Irkutsk aluminium smelter 100% 103 102 0.8% 307 293 4.7%
Khakas aluminium smelter 100% 72 72 -0.3% 215 214 0.6%
 
Russia — Other
Nadvoitsy aluminium smelter 100% 3 3 2.3% 9 9 4.5%
Kandalaksha aluminium smelter 100% 17 17 1.0% 50 48 3.9%
 
Sweden
Kubikenborg Aluminium (KUBAL) 100% 29 28 3.8% 86 84 3.3%
 
Total production6 916 908 1.0% 2,724 2,686 1.4%

6 Here and further “total production” may not equal to the arithmetic addition of the numbers above presented in the table. The difference arises due to the roundoff of exact numbers (incl. decimals).

Foil and packaging production

(‘000 tons)   Interest   3Q15   2Q15  

Change,
%(QoQ)

  9M15   9M14  

Change,
%(YoY)

 
Russia
Sayanal 100% 9.5 9.7 -1.5% 29.1 30.9 -5.8%
Ural Foil 100% 4.8 4.1 15.6% 13.1 14.1 -6.9%
Sayana Foil 100% 0.8 0.8 3.6% 2.3 2.3 -2.2%
 
Armenia
Armenal 100% 6.9 7.5 -8.1% 22.2 21.7 2.3%
 
Total production 22.1 22.1 -0.4% 66.7 69.0 -3.3%

Other aluminium products production

(‘000 tons)   3Q15   2Q15  

Change,
%(QoQ)

  9M15   9M14  

Change,
%(YoY)

 
Secondary alloys 4.8 6.2 -22.8% 17.1 16.5 3.8%
Cathodes
Silicon 14.8 15.3 -3.4% 45.1 39.7 13.6%
Powder 4.4 4.6 -5.0% 13.4 15.8 -15.5%

ALUMINA PRODUCTION

(‘000 tons)   Interest   3Q15   2Q15  

Change,
%(QoQ)

  9M15   9M14  

Change,
%(YoY)

 
Ireland
Aughinish Alumina 100% 504 476 6.0% 1,468 1474 -0.4%
 
Jamaica
Alpart
Windalco7 (Ewarton and Kirkvine Works) 100% 148 143 3.6% 439 407 7.8%
 
Ukraine
Nikolaev Alumina Refinery 100% 379 362 4.7% 1,093 1084 0.8%
 
Italy
Eurallumina 100%
 
Russia
Bogoslovsk Alumina Refinery 100% 237 239 -1.0% 696 695 0.1%
Achinsk Alumina Refinery 100% 217 222 -2.3% 663 669 -0.9%
Urals Alumina Refinery 100% 194 193 0.6% 577 576 0.2%
Boxitogorsk Alumina Refinery 100%
 
Guinea
Friguia Alumina Refinery 100%
 
Australia (JV)
Queensland Alumina Ltd 20% 191 184 3.9% 559 530 5.5%
 
Total production 1,870 1,818 2.8% 5,496 5,435 1.1%

7 The Company controlled 93% of Windalco during 2014 and consolidated 100% stake in Windalco in December 2014.

BAUXITE MINING

(‘000 tons wet)   Interest   3Q15   2Q15  

Change,
%(QoQ)

  9M15   9M14  

Change,
%(YoY)

 
Jamaica
Alpart 100% 61 100.0% 61 100.0%
Windalco8 (Ewarton and Kirkvine) 100% 502 478 4.9% 1,492 1435 4.0%
 
Russia
North Urals 100% 630 661 -4.6% 1,975 2112 -6.5%
Timan 100% 1119 965 16.0% 2,857 2163 32.1%
 
Guinea
Friguia 100%
Kindia 100% 846 856 -1.2% 2,565 2470 3.8%
 
Guyana
Bauxite Company of Guyana Inc. 90% 330 263 25.6% 883 995 -11.3%
 
Total production 3,488 3,223 8.2% 9,834 9,176 7.2%

Nepheline production

(‘000 tons wet)   Interest   3Q15   2Q15  

Change,
%(QoQ)

  9M15   9M14  

Change,
%(YoY)

 
Kiya Shaltyr Nepheline Syenite 100% 1,053 1,040 1.2% 3,159 3,384 -6.6%

8 The Company controlled 93% of Windalco during 2014 and consolidated 100% stake in Windalco in December 2014.

JOINT VENTURES PRODUCTION

  3Q15   2Q15  

Change,
%(QoQ)

  9M15   9M14  

Change,
%(YoY)

 
Bogatyr Komir and Bogatyr Trans
Coal (50%) (Kt) 3,973 3,121 27.3% 11,803 13,035 -9.5%
Transport (50%) (Kt of transportation) 1,841 1,234 49.1% 4,465 4,855 -8.0%
 
Boguchanskaya HP
Electricity generation, mwh 4,231 3,610 17.2% 10,195 6,325 61.2%
By Order of the Board of Directors of

United Company RUSAL Plc
Aby Wong Po Ying
Company Secretary

28 October 2015As at the date of this announcement, the executive Directors are Mr. Oleg Deripaska, Mr. Vladislav Soloviev and Mr. Stalbek Mishakov, the non-executive Directors are Mr. Maxim Sokov, Mr. Dmitry Afanasiev, Mr. Len Blavatnik, Mr. Ivan Glasenberg, Mr. Maksim Goldman, Ms. Gulzhan Moldazhanova, Mr. Daniel Lesin Wolfe, Ms. Olga Mashkovskaya and Ms. Ekaterina Nikitina, and the independent non-executive Directors are Mr. Matthias Warnig (Chairman), Dr. Peter Nigel Kenny, Mr. Philip Lader, Ms. Elsie Leung Oi-sie, Mr. Mark Garber and Mr. Dmitry Vasiliev.

All announcements and press releases published by the Company are available on its website under the links http://www.rusal.ru/en/investors/info.aspx, http://rusal.ru/investors/info/moex/ and http://www.rusal.ru/en/press-center/press-releases.aspx, respectively.

Contacts

United Company RUSAL Plc

Contacts

United Company RUSAL Plc