Rusal profit plunges 84.3% in 2023 on reduced prices

Russian aluminium giant United Company Rusal International (Rusal) has disclosed a significant decline in its net profit for the fiscal year ending on December 31, 2023.

Rusal

Russian aluminium giant United Company Rusal International (Rusal) has disclosed a significant decline in its net profit for the fiscal year ending on December 31, 2023. The company attributes this downturn to a notable decrease in the average realised aluminium price throughout the year, resulting in a substantial impact on its financial performance. Despite facing challenges, Rusal remains resilient, as evidenced by its strategic efforts to address market dynamics and maintain operational stability.

Financial Performance Declines Amidst Alarming Aluminium Price Drops

Amidst a challenging market landscape, Rusal has reported a staggering 84.3% decline in net profit, marking a substantial drop from the previous fiscal year. This downward trend is primarily attributed to a significant decrease in the average realised aluminium price, which plummeted by 18% in 2023 compared to the preceding year.

Revenue Reduction Reflects Market Volatility

Rusal’s total revenues witnessed a decline of 12.6% in 2023, reflecting the impact of fluctuating aluminium prices and broader market volatility. Despite the challenges posed by external factors, the company remains focused on optimizing its operations and enhancing efficiency to mitigate financial strain.

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Adjusted EBITDA Suffers Sharp Decline

The company’s adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) experienced a sharp decline of 61.2% in 2023, underscoring the challenges posed by prevailing market conditions. This downturn resulted in a decrease in the adjusted EBITDA margin, further highlighting the need for strategic adjustments to enhance profitability.

Sales Growth Amidst Operational Challenges

Despite facing financial headwinds, Rusal achieved a 6.6% increase in sales of primary aluminium and alloys, demonstrating resilience amidst operational challenges. This growth was attributed to the strategic release of excess inventory accumulated in the previous year, reflecting the company’s proactive approach to managing supply chain dynamics.

Strategic Capital Expenditure Aligned with Operational Objectives

Rusal’s total capital expenditure in 2023 amounted to $1.06bn, primarily directed towards maintaining existing production facilities and enhancing operational efficiency. This strategic investment underscores the company’s commitment to sustaining its competitive edge amidst evolving market dynamics.

Despite encountering significant challenges stemming from declining aluminium prices and market volatility, Rusal remains steadfast in its commitment to operational excellence and strategic growth. The company’s proactive measures to address financial headwinds, coupled with its focus on optimizing operations and enhancing efficiency, position it well to navigate the evolving landscape of the global aluminium market.

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