OK RUSAL United Company RUSAL Russian Aluminum United Company Rusal UC Rusal

The world's largest producer of aluminum and alumina was created in March 2007 as a result of the merger of Rusal, the third largest aluminum producer in the world, SUAL Group, one of the ten largest global aluminum producers, and alumina assets of the Swiss company Glencore.

The company includes enterprises for the extraction of bauxite and nepheline ore, the production of alumina, aluminum and alloys, foil and packaging materials based on it, as well as energy assets. On five continents in 19 countries of the world, the company employs more than 75 thousand people.

• Until March 2007, Russian Aluminum (RUSAL) is the largest Russian aluminum company, the third largest aluminum producer in the world (10% of global metal production). Headquarters - in Moscow. Full name - Open Joint Stock Company "Russian Aluminum."

Information Technology at Rusal

A separate article is devoted to the development of information technologies at Rusal factories.

Performance indicators

2023: 12.6% decline in revenue to $12.21 billion

At the end of 2023, Rusal's revenue amounted to approximately $12.21 billion. This is 12.6% less than in 2022, when the figure was $13.97 billion. The corresponding figures are given in the financial report released on March 14, 2024.

Adjusted net profit of Rusal in 2023 was recorded at $73 million. For comparison: a year earlier, the value was $725 million. Thus, according to this indicator, a drop of 89.9% was noted.

Rusal's revenue amounted to approximately $12.21 billion

The report said demand for aluminium remained under pressure from global economic uncertainty in 2023. At the same time, geopolitical tensions had a negative impact on the company's performance, including an unprecedented regime of external restrictions and interruptions in supply chains, as well as a significant drop in metal prices. Under these conditions, Rusal concentrated on ensuring raw material independence, reconfiguring export sales channels and developing the domestic market.

At the same time, in 2023, sales of primary aluminum and alloys of Rusal increased by 6.6% - to 4.153 million tons against 3.896 million tons in 2022. Aluminum production increased by 0.3% and amounted to 3.85 million tons. At the same time, bauxite production rose on an annualized basis by 8.6%, to 13.38 million tons, and alumina - decreased by 13.8%, to 5.13 million tons. In 2023, the average price of aluminum on the London Metal Exchange fell by $455 - to $2252 per ton.

In 2023, global economic uncertainty, high inflation and the constant threat of recession continued to weigh on the outlook for aluminum consumption. Geopolitical tensions, restraining the growth of the global economy, led to disruption of supply chains and weakness of sales markets, the financial report said.[1]

2022: Revenue growth of 16.5% to $13.97 billion

Rusal's revenue in 2022 reached $13.97 billion, an increase of 16.5% compared to 2021. Such data were released by one of the world's largest producers of primary aluminum and alumina on March 17, 2023.

Net profit of Rusal in 2022 decreased by 44.4% and amounted to $1.79 billion. By the end of 2022, the company's net debt reached $6.26 billion, exceeding the level of a year ago by 32%.

The company also announced that in 2022 it managed to increase aluminum production by 1.9% (to 3.84 million tons) compared to the previous year. At the same time, Rusal reported a decrease in the production of bauxite and alumina by 18% (to 12.32 million tons) and 28.3% (5.95 million tons), respectively, and the company's total sales decreased by 0.2% - to 3.896 million tons of aluminum and alloys.

In addition, the document notes that the extreme rise in energy prices and raw materials, along with the strengthening of the ruble and the complication of logistics, led to an increase in the cost of aluminum production by 31.8%, to $2,190 per ton.

In 2022, Rusal faced unprecedented pressure and restrictions due to the Australian government's ban on the export of alumina and aluminum ores to Russia, as well as the shutdown of alumina production at the Nikolaev alumina plant. The company had to quickly find new suppliers and build new supply chains, the company said in a statement.

Adjusted EBITDA of Rusal in 2022 decreased by 29.9% and amounted to $2.03 billion. EBITDA margin dropped to 14.5% versus 24.1% in 2021. At the same time, the turnover of the aluminum company at the end of 2022 grew to $4.83 billion, which is 65% higher than the end of 2021. Capital expenditures increased by 4% and reached $1.24 billion.^[2]

2021

Revenue growth by 40%, to $11.99 billion, profit - $3.23 billion

At the end of 2021, Rusal raised $11.99 billion, which is 40% more than a year earlier. The company's net profit reached $3.23 billion against $759 million in profit recorded in 2020.

As reported in the reporting, the increase in annual revenue was due to an increase in the average price of aluminum sales to $2553/t (+ 41.4% on an annualized basis), which was facilitated by both an increase in the average price on the London Metal Exchange taking into account the quotation period (LME QP) (+ 38.9% yoy, to $2303/t) and an increase in the average realized premium (+ 70.4% yoy, to $250/t).

Sales of value-added products increased by 18.1% and amounted to 2034 thousand tons. The share of sales of value-added products in total sales recovered to 52% (compared to 44% in 2020).

At the same time, turbulence in the global market led to an increase in production costs. The cost of producing a ton in the aluminum segment in 2021 increased by 9.9%, amounting to $1,661 per ton (compared to $1,512 per ton in 2020), under the influence of rising costs for energy and other materials.

Net cash flow from operating activities increased by 5% over the year, amounting to $1.15 billion. Rusal's working capital grew by 81% over the year, amounting to $2.93 billion. Capital expenditures increased by 33% in 2021, amounting to $1.19 billion. The company's net debt decreased by 14.6% over the year, to $4.75 billion.

In 2021, the sale of primary aluminum and alloys amounted to $9.97 billion against $7.09 billion a year earlier. This is primarily due to an increase of 41.4% in the weighted average price of aluminum sales per ton. Revenue from sales of alumina in 2021 increased by 14.4%. In physical terms, sales of these products changed slightly and amounted to 3.9 million tons.^[3]

Drop in aluminum sales by 0.5%, to 3.9 million tons

Rusal's aluminum sales in 2021 decreased by 0.5% compared to 2020 and amounted to 3.9 million tons. The company announced this in its statements published on February 9, 2022.

At the end of 2021, Rusal increased its aluminum production by 0.2% compared to a year ago, to 3.76 million tons. The selling price for this metal rose by 41.4%, to $2,553 per ton.

The increase was due to both an increase in the average price of aluminum on the London Metal Exchange (LME), taking into account the quotation period (+ 38.9% compared to last year to $2,303 per ton), and an increase in the average realized premium (+ 70.4% compared to last year to $250 per ton).

The increase in the realized premium during the 12 months of 2021 is associated with an increase in the commodity premium, as well as an increase in the share of value-added products (PDS) in the sales structure and an increase in the product premium, Rusal said in a statement.

In 2021, the share of Europe in Rusal's sales structure decreased to 41% (compared with 45% in 2020). The shift was towards the Russian market and the CIS countries, where sales rose to 27% (against 23% in 2020), as well as towards the United States - 8% (against 7% in 2020), respectively.

In 2021, aluminum sales in Russia amounted to 865 thousand tons (+ 18.8% compared to the previous year). If we take into account aluminum directed to the enterprises of the downstream division of the company for the production of foil, automobile discs and aluminum powder, and other products, the total supply volume in Russia amounted to 957 thousand tons (+ 18.8% compared to the previous year). In general, supplies to the Russian and CIS markets reached a record 1.2 million tons, which is 19.6% more than in 2020.

According to the Russian company, in 2021, global demand for primary aluminum increased by 8.8% to 69.0 million tons. Aggregate demand excluding China increased 12.8% to 28.6 million tons.^[4]

History

2024: Director of the Rusal department received 8 years in prison for fraud worth 1 billion rubles

On July 17, 2024, it became known that the Dorogomilovsky District Court of Moscow issued a verdict against a former high-ranking employee of the United Company (OK) Rusal Alexei Tarasov. He was sentenced to eight years in prison in a case of particularly large fraud. Read more here.

2023: Rusal buys stake in HWNM

Rusal signed an agreement to buy a 30% stake in the Chinese metallurgical company Hebei Wenfeng New Materials (HWNM). This deal became known on October 24, 2023. Read more here.

2022: Blavatnik sells stake in company

In May 2023 , it became known that Leonard Blavatnik sold his stake in the Russian aluminum producer United Co. Rusal International, having disposed of its last major asset in the country, where it made its fortune of $33.5 billion .

Blavatnik sold shares in the second half of 2022, according to sources. His stake in Rusal was about 1.2 billion shares, the market value of which at the end of 2022 was about $610 million.

2021

Shareholders blocked the renaming of Rusal to AL +

Shareholders of aluminum producer UC Rusal, which owns 27.68%, including its second largest shareholder Sual Partners Viktor Vekselberg and Leonard Blavatnik (as of April 2021, owns 25.7%), during the annual meeting voted against changing the name of the company to AL +. This follows from the company's message, which it distributed on the morning of June 25, 2021.

At the same time, the owners of 65.22% of UC Rusal (including its controlling shareholder En + with a share of 56.9%) advocated a change in the name of the company and amendments to the charter. However, this decision requires a qualified majority of 75% + 1. As a result, a decision on this issue "was not made."

According to a company representative, the task of management is to work in the interests of all UC Rusal shareholders, so the company is interested in getting support from those shareholders who have not yet heard sufficient arguments to make a decision. "Management will continue to work on this," he concluded. The company is confident that "the new brand, the new name better reflects the achievements, goals and values ​ ​ of the company and such a step is in the strategic interests of all shareholders."[5]

Name change to AL +

On May 19, 2021, Rusal announced a restructuring in which one of the world's largest aluminum producers changes its name (to AL +) and divides assets.

The new AL + name is an embodiment of the key values and priority of environmental progress in the company's strategy. The new brand reflects the global leadership of the company as the largest producer of value-added products and aluminum with a low carbon footprint, a reliable partner whose priority is development, innovation, international coverage and modern technologies, the company's press service reports.

The new name of the company resembles the brand of its parent structure - En + holding. UC Rusal and En + in April 2018 together fell under US sanctions. At that time, they were controlled by billionaire Oleg Deripaska.

Rusal announced the separation of assets with a high carbon footprint into a separate structure. The new company will include such aluminum plants as, Brotherly,, Irkutsk, Novokuznetsk Volgograd Kandalaksha alumina assets (Achinsky, Bogoslovsky, Uralsky, Pikalevsky), mining assets - the North Ural bauxite mine, Boksit Timana. A significant part of the old electrolysis capacity will be rebuilt and transferred to the most modern technology using burned anodes. "Net" assets will remain in the main structure, which will change its name to AL +.

After the transformation of the business, the company will retain most of its production assets and concentrate its activities on developing a business based on the principles of sustainable development, focusing on the introduction of an inert anode in order to achieve a zero balance of greenhouse gas emissions in aluminum production, Rusal said in a statement^[6]

Purchase by German aluminium alloy manufacturer Aluminum Rheinfelden

In February 2021, Rusal announced the purchase of Aluminum Rheinfelden at a price that the companies did not disclose. Rusal believes that Aluminum Rheinfelden's experience in innovation and deep technical expertise (the company owns more than 70 patents), taking into account extensive ties in the automotive sector, will help strengthen the position of the Russian company as a priority supplier to the international automotive industry. Read more here.

2020: Revenue growth 11.8% to $8.57 billion, net debt $5.56 billion

Rusal's revenue following the results of its work in 2020 decreased by 11.8% compared to 2019 and amounted to $8.57 billion. Net profit during this time fell by 20.9%, to $759 million. 

The company attributed the decrease in revenue to a 5% decrease in the average price of aluminum on the London Metal Exchange (LME) from $1,792 thousand per ton in 2019 to $1,702 thousand per ton a year later, as well as a decrease in the volume of sales of primary aluminum and alloys by 6%.

Rusal also draws attention to the fact that there is a comparison with a higher base in 2019, when sales volumes were higher than normal due to the sale of excess stockpiles of primary aluminum accumulated during 2018 due to OFAC sanctions.

From the reporting of the aluminum producer it follows that its net debt by December 31, 2020 amounted to $5.56 billion, which is 14% of the value of a year ago. Rusal's capital expenditures for the year increased by 5.8%, reaching $897 million.

Significantly, the indicators increased in the second half of the year, as a result, compared to 2019, sales of value-added products (PDS) increased by 11.3%, to 1,722 thousand tons, - says the general director of Rusal Evgeny Nikitin, commenting on the results of 2020. - We also increased our market share compared to competitors. The share of PDS in total sales amounted to 44% (against 37% in 2019). All this is against the background of a global decline in demand for aluminum due to COVID-19.

The cost of producing one ton in the aluminum segment in 2020 decreased by 7.1%, to $1,512 per ton compared to $1,627 a year earlier. The decline occurred despite market volatility and was achieved through effective cost management in combination with the depreciation of the Russian ruble, Rusal explained.

Rusal 2020 Financial Statements

2018

Oleg Deripaska resigned from the board of directors of Rusal

Businessman Oleg Deripaska resigned from the board of directors of Rusal, where he was a non-executive director, due to US sanctions. This is stated in the message of the enterprise posted on the website of the Hong Kong Exchange.

He resigned on May 25, the statement says.

"Mr. Deripaska confirmed that he has no disagreements with the council and that there is no other reason for his resignation, which must be brought to the attention of shareholders," the document says.

Washington in early April imposed sanctions on Russian businessmen, companies, officials and top managers of state corporations. The list includes Deripaska, Rusal, En + and other structures of the businessman. Later, the United States announced its readiness to lift sanctions on Rusal if Deripaska relinquishes control of the company.

Prokhorov will sell his stake in Rusal to Vekselberg and Blavatnik

The Onexim group of Mikhail Prokhorov agreed in early 2018 to sell a 6% stake in Rusal to the Zonoville Investments Limited consortium, which is headed by Viktor Vekselberg and Leonard Blavatnik^[7]

After the transaction, they will own 26.5% of Rusal's shares, that is, a blocking stake, Vedomosti writes.

The amount of the transaction is not named.

In different years, Mikhail Prokhorov owned from 14% to 17% of Rusal's shares. In 2017, he sold Vekselberg and Blavatnik a 7% stake.

2017

Shares of the aluminum holding UC Rusal owned by Mikhail Prokhorov passed to Viktor Vekselberg

Zonoville Investments Limited bought 7 percent of UC Rusal, the world's largest aluminum producer, from Mikhail Prokhorov's structures in August 2017. The beneficiaries of Zonoville Investments Limited are several shareholders of another large minority shareholder of the aluminum holding - SUAL Partners, including the main owner of Renova, Viktor Vekselberg. It was Vekselberg who was named the guarantor of the buyer in the message about the transaction, while Mikhail Prokhorov acts as the guarantor of the seller.

The value of a 7 percent stake in UC Rusal is determined at $503.885 million. At the same time, at the time of publication of information about the transaction, 7 percent of UC Rusal shares were worth $714 million on the Hong Kong Stock Exchange. The average cost of the package over the past six months is $482 million.

The search for buyers for his UC Rusal package (17.02 percent) "Onexim" Mikhail Prokhorov began in the summer of 2016. Negotiations with SUAL Partners discussed the possibility of buying a 12 percent stake for $700 million. But while negotiations were underway, the situation changed: in the summer of 2016, UC Rusal quotes were near historical lows, but over the year the company's capitalization almost doubled and today amounts to $10.3 billion. Onexim was not ready to sell papers at last year's price. As a result, 3.32 percent of UC Rusal was sold on the stock exchange in February for $240 million. After the current deal, Onexim's stake in the aluminum holding will be reduced to 6.7 percent.

2016

Prokhorov sells 12% of UC Rusal for $700 million to Vekselberg and Blavatnik

In October 2016, it became known that Onexim Mikhail Prokhorov would sell 12% of UC Rusal for $700 million. The package is bought by the co-owner of the company - Sual Partners Viktor Vekselberg and Leonard Blavatnik.

Onexim began looking for a buyer for a stake in UC Rusal after the FSB conducted searches at the head office of the company in early June 2016. Later, the FSB reported that this was due to the Tavrichesky bank, which will sanitize the IFC controlled by Onexim. But sources surrounded by the owner of Onexim Prokhorov and federal officials said that the searches were an act of intimidation: the Kremlin was unhappy with the editorial policy of the RBC media holding owned by Onexim. After that, Vedomosti sources reported that Prokhorov was going to sell Russian assets. It is incorrect to conclude on the basis of the fact of negotiations about the "sale of all assets in Russia." We did not make any "decisions on this topic" - this is how the general director of Onexim Dmitry Razumov reacted to this information. Nevertheless, in July 2016, Onexim sold a 20% stake in Uralkali to Belarusian businessman Dmitry Lobyak. The amount of the transaction was not disclosed.

"We want to increase our package [at UC Rusal]. It's reasonable, it's natural. We are in this company from the very beginning. We believe in this company. We see its great potential, "Vekselberg told the Russia 24 TV channel on October 26. He added that the deal would soon close

.

For about 12% of the available 17% stake in UC Rusal, Onexim will receive about $700 million, three sources close to different sides of the upcoming deal said. Thus, the share of Sual Partners will grow from 15.8 to 27.8%. En + Oleg Deripaska at this time controls 48.13% UC^[8].

The deal could close by the end of November, says a source close to one of UC Rusal's shareholders. Funds for the redemption of the package will be provided by VTB and Sberbank, but the loan size has not yet been determined, he adds. Earlier, Vedomosti interlocutors said that Sberbank has already approved Sual Partners financing for $350 million. But it is not a fact that in the end Sberbank will participate in the transaction, says a source close to Sberbank. Until recently, the Onexima package was laid down under a repo deal at VTB, but later the bank announced that the size of the package would be reduced from 17.02 to 13.16%.

The price of $700 million for 12% assumes a premium to the current market price of 17.3%. If aluminum, which is now trading near $1600 per 1 ton (about 6% below annual highs), begins to rise in price, then UC Rusal may cost more and then it cannot be said that this is a very good premium, says the manager of the investment fund, which is also invested in the securities of metallurgical companies.

But so far there are no special prerequisites for rising metal prices - in China there is still an excess of it, the source said.

At the same time, Onexim will have time to receive $42.55 million in dividends from UC Rusal - the second in almost six years. On October 25, 2016, creditors allowed UC Rusal to pay $250 million in interim dividends. The register closed on October 3. Payments are scheduled to be completed on October 31. The same amount - $42.55 million - Onexim received from UC Rusal in 2015.

Sual Partners buys 12% of UC Rusal to keep the shareholder agreement. According to it, the share of Onexim should not decrease by less than 5%. In addition, such a package allows him to nominate one candidate to the board of directors of Norilsk Nickel, which UC Rusal will be obliged to conduct. Until the summer of 2010, Razumov was such a candidate. After that, representatives of Onexim were not elected to the council. In addition, the purchase of the entire stake would lead Sual Partners to the need to offer an offer to the rest of UC Rusal's shareholders. If you buy 12%, you won't need it.

Vekselberg resigns as board chairman

In March 2012, Viktor Vekselberg, due to disagreements with the management of the company, resigned as chairman and member of the board of directors of Rusal.

SUAL demands in court to cancel Rusal's deal with Glencore

In April of the same year, SUAL filed a lawsuit with the London Arbitration Court demanding to cancel the deal with Glencore and compensate SUAL for the losses caused.

2011: Shareholder conflict over Deripaska's deal with Glencore

In December 2011, the media wrote about the conflict between SUAL Blavatnik Victor Vekselberg and the largest shareholder of "," RUSAL En +. Oleg Deripaska One of its reasons was the conclusion by Rusal of a large contract with a trader Glencore , contrary to the veto imposed by SUAL (SUAL had the right to veto as the owner of 15.8 percent of Rusal's shares).

2008: Onexim becomes shareholder of UC Rusal

Onexim became a shareholder of UC Rusal in 2008. Then Mikhail Prokhorov and Vladimir Potanin divided the business, including Norilsk Nickel. Onexim received $4.5 billion and 14% of UC Rusal shares for the Norilsk Nickel block. The rest of the payment - $2.7 billion - had to be restructured due to the crisis. Then Onexim received another 6% of UC Rusal, bonds for $880 million were also issued in its favor, the group received $275 million in cash.

2007: Amalgamation with SUAL and Glencore assets

In March 2007, the assets of Russian Aluminum were merged with the assets of the Siberian-Ural Aluminum Company (SUAL) and the Swiss commodity trader Glencore into the world's largest aluminum company Russian Aluminum (United Company Rusal).

Notes