Russia's Rusal delays decision on dividend, core profit jumps

Russia's Rusal has decided to delay a decision on its possible first dividend since listing five years ago though its second-quarter core profit more than doubled thanks to cost cuts and a weaker rouble. The rouble's decline supports the world's top aluminium producer by partially offsetting weak aluminium prices, which are already at six-year lows and, according to Rusal, will remain under pressure due to a glut of exports from China.

"We expect that (the) aluminium market is likely to remain challenging for the remainder of the year," Chairman Matthias Warnig said in a statement. Rusal's core profit, or adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), soared to $568 million for the three months to June from $220 million a year earlier, topping analysts' forecasts of around $467 million.

The market had thought Rusal would announce its first dividend since listing in 2010, after it said earlier this month that was under consideration. Its net debt fell $600 million from the end of March to $8 billion at the end of June. Rusal's board of directors adopted a new dividend policy on August 26, but decided to delay the decision on dividend payment, the company said. The board will consider the dividend question by the end of September.

Rusal's shares were up 1 per cent by 0851 GMT. Rusal predicted global supply would outstrip demand by 277,000 tonnes in 2015, but that was less bearish than US rival Alcoa's forecast for a surplus of 760,000 tonnes this year. It said it doubted Chinese producers would increase exports of semi-manufactured aluminium products, such as plates for window frames and beer cans, as those shipments were already loss-making.

Rusal expects to decide later this year on plans to cut 200,000 tonnes per year of capacity. However, the company is still on track to start its new Boguchansk smelter in Russia by the end of 2015.