Rusal swings to profit in 2015 despite low aluminium prices
Hong Kong - AFP
Russian aluminium giant Rusal said Wednesday a plunge in the price of the metal hit revenues last year as fourth-quarter net profit dived but said it was confident demand would pick up in 2016.
The cost of aluminium fell to a six-year low in late 2015, Bloomberg News reported, with supply exceeding demand by 300,000 tonnes as Chinese production surged.
The European Union Chamber of Commerce warned last month that China's overcapacity in producing metals was wreaking "far reaching" damage on the global economy.
The nation's steel industry manufactures more than the next four largest producers combined -- Japan, India, the US, and Russia.
The Hong Kong-listed Rusal saw revenue slip 7.2 percent year on year to $8.68 billion in 2015. And it posted a net loss in final three months of $267 million, widening from $102 million a year earlier.
But the Moscow-based firm pinned its hopes on continued growth in demand for the metal.
"Rusal expects that the global aluminium demand will continue its growth at a healthy 5.7 percent during 2016... as a result of a strong demand growth in North America, Europe and Asia," it said in a filing to the Hong Kong stock exchange.
"Chinese growth is expected to continue to be strong," it added.
Despite the weak end to the year, Rusal posted a net profit of $558 million for the 12 months to December 31, compared with a net loss of $91 million in 2014. The positive figures were boosted by lower administrative and distribution expenses, with total liabilities down 9.5 percent.
Aluminium output was also flat, edging up 1.2 percent to 3.65 million tonnes as the firm said in February it was mulling production cuts to support prices.
Rusal shares closed down 2.5 percent at HK$2.73 in Hong Kong following the announcement.
China Hongqiao Group surpassed Rusal as the world's biggest producer of aluminium in the first half of last year.