RUSAL’s Q2 FY2016-17 core earnings to rise 8% QoQ, say analysts

Russian aluminium behemoth UC Rusal is expected to post a quarter-on-quarter eight per cent surge in core earnings in the second quarter of FY2016-2017, according to a survey conducted among analysts from six global banks.

Analysts are of the opinion that Rusal's Q2 FY2016-17 earnings before interest, taxation, depreciation and amortisation (EBITDA) will see a rise from $312 million in the first quarter to $336 million. They attribute this increase in earnings to the recent recovery in global aluminium prices.

Aluminium traded on the London Metal Exchange (LME) has improved 11 per cent since 2016 beginning when prices were at their months' lows. However, the weakness in the light metal market is still anticipated to be weighing on the aluminium major's year-on-year financial results.



Income from associates usually has significant impact on Rusal's net profit. Analysts are looking at factors like revaluation of electricity derivative contracts and some non-cash items of the associates to have their impact on Rusal's Q2 performance.

Rusal reported a 57 per cent YoY slump in first-quarter core earnings, hurt by weaker aluminium prices. Core earnings, however, were up 2 percent from the December quarter. Average sale prices during the quarter fell 28 per cent from a year earlier, while its sales of primary aluminium and alloys rose 2.4 per cent to 957,000 tonnes.