UC RUSAL announces its results for the year ended 31 December 2014

Key highlights

• Positive trends in the aluminium market observed during the year ended 31 December 2014 with recovering London Metals Exchange (“LME”) aluminium prices and growing premiums, coupled with weakening local currency had significant positive effect on the profitability and financial results of RUSAL. Net Profit for 2014 comprised USD293 million as compared to Net Loss of USD3,322 million for 2013.

• In August 2014 the Company successfully completed refinancing of its debt portfolio including PXF and bilateral facilities. Terms of the refinancing allow the Company to postpone the scheduled repayments of principal until January 2016. However, in December 2014, the Company made an early repayment of USD300 million of the outstanding debt in addition to USD53 million repaid in 2014 through the cash sweep mechanism. As a result of these efforts supported by the strong financial results, the Company achieved a leverage ratio below 4.5:1 as at 31 December 2014 that will decrease interest rate margin starting from March 2015.

• Focus on strict production discipline, procurement optimization and product mix improvement resulted in Adjusted Net Profit of USD387 million for the fourth quarter of 2014. Recurring Net Profit for the year ended 31 December 2014 comprised USD870 million as compared to Recurring Net Loss of USD598 million for the preceding year.

• Primary aluminium production decreased by 6.6% or by 256 thousand tonnes to 3,601 thousand tonnes for the year ended 31 December 2014 as compared to 3,857 thousand tonnes for the preceding year as a result of successful completion of the inefficient capacity curtailment programme.

• Aluminium segment cash cost per tonne reduced to USD1,729 per tonne (by 9.3%) in 2014 as compared to USD1,907 in 2013 resulting from efficiency initiatives supported by depreciation of Russian Ruble and Ukranian Hryvna. Aluminium segment cash cost per tonne in the fourth quarter of 2014 achieved record low of USD1,671 per tonne as compared to USD1,864 for the last quarter of the preceding year.

• Share of value-added products continued to grow and reached a record high 45% of total aluminium production in 2014 in comparison with 42% for the previous year.

• All these factors resulted in the increase of Adjusted EBITDA by USD863 million or by 132.6% to USD1,514 for the year ended 31 December 2014 as compared to USD651 million for the preceding year.

Commenting on the full year results, Vladislav Soloviev, CEO of RUSAL said:

“The period under review was mixed for the aluminium sector, in the first quarter the aluminium price fell to its lowest level in almost five years, however positive market price dynamics supported by growing demand and ex-China deficit helped the sector recover in the middle of the year. In the fourth quarter of 2014, the slump in global oil prices coupled with a strengthening US Dollar depressed most commodities’ prices, with the LME price for aluminium declining to levels below USD1,900 per tonne.

Against the backdrop of such a volatile environment, RUSAL focused on the key elements of its operational strategy in order to return to profitability.

With the ramifications of the 2009 industry crisis firmly in our mindset, the Company has no plans to restart any mothballed aluminium capacity, regardless of the LME price. Optimisation of production capacity is a long-term way of ensuring the industry does not face another overproduction crisis, and the Company is committed to maintaining stable aluminium output albeit with marginal increases following the commencement of operations at the Boguchansky smelter.

Looking at the industry as a whole, we believe that global aluminium demand will grow by 6.5% in 2015 to 59 million tonnes, while production growth outside of China will continue to be limited, with 1.1 million tonnes remaining in supply deficit. We have recently witnessed LME stocks decline below a psychologically important mark of 4 million tonnes and based on the current supply and demand balance, we estimate that inventories will return to their historically normal level in 2016.

During the period, RUSAL demonstrated its ability to respond to very challenging market conditions and our steadfast adherence to our corporate strategy, led to a strong set of results. Thanks to this discipline, we are well positioned to continue our growth trajectory into the next reporting period.”