Production cost surge fails to suppress Rusal’s aluminium output in 2022 but weighs on profit

On Friday, March 17, Rusal announced a higher aluminium production in 2022, mitigating several challenges like Australia’s alumina export ban to Russia, suspension of alumina production at the Mykolaiv refinery, and inflated production cost due to energy and raw materials price hike. Rusal’s aluminium output in the full year stood at 3.835 million tonnes, up by 1.9 per cent from 3.764 million tonnes in 2021 amid a 31.8 per cent rise in production cost to US$2,190 per tonne versus US$1,661 per tonne last year.

Thanks to the efficient management model, Rusal could rebuild raw material supplies and supply chains and successfully diversify sales channels, redirecting finished product flows to domestic and Asian markets. Thus, the company’s aluminium sales recorded no significant downfall but stood steady at 3.896 million tonnes for 2022 versus 3.904 million tonnes in 2021.

However, Rusal’s adjusted EBITDA decreased by 29.9 per cent Y-o-Y to US$2.028 million from US$2,893 million. Adjusted EBITDA margin fell to 14.5 per cent from 24.1 per cent in 2021. The company’s profit also dwindled, owing to high production costs and no rise in sales. As per the annual result reported, Rusal’s 2022 profit stood at US$1,793 million, down by 44.4 per cent Y-o-Y.

However, the company’s revenue edged an increase of 16.5 per cent Y-o-Y from US$11,994 million to US$13,974 million, attributed to the rise in the average sales price of both aluminium and alumina from US$2,553 per tonne to US$2,976 per tonne and US$329 per tonne to US$362 per tonne, respectively, in tandem with the higher premiums over the LME aluminium price from US$250 per tonne to US$309 per tonne.

Rusal’s alumina and bauxite output, on the other hand, slumped by 28.3 per cent over the year from 5.953 million tonnes to 8.304 million tonnes in 2022 and 18 per cent on year from 15.031 million tonnes to 12.319 million tonnes.

The company revealed that its working capital at the end of December 2022 totalled US$4,833 million compared to US$2,930 million a year ago.