Rusal recorded the first losses from US sanctions

Revenues in the second quarter of 2018 decreased by almost 18% compared to the first quarter of this year. The volumes of metal sold also fell.
06.08.2018
Vedomosti
Origin source
 UC Rusal, the world's second largest aluminum producer, has published financial and operating results for the second quarter and first half of 2018. This is the company's first statement after the US Treasury Department imposed sanctions on April 6, its main owner Oleg Deripaska and seven other companies .

In April-May, the company sold 783,000 tons of aluminum. This is 18.9% less than in the first three months of the year, and 21.9% less than in the second quarter of 2017. Revenue for the II quarter was $ 2.25 billion, which is also down by 17.9% of the previous quarter and by 8.7% compared to the second quarter of 2017. Net profit fell by 25%, to $ 408 million. To compensate for the drop in sales did not help even the growth in prices for aluminum (by 2.2% compared to the first quarter of this year , to $ 2,209 / t) and high premiums for supplies.

After the publication of interim statements, the company went up 3.2% on the Hong Kong exchange, to $ 4.4 billion (data at 9.30 am in Moscow).

 The main reason for the reduction in aluminum sales is the company's failure in the supply system of this metal. American residents are prohibited from doing business with sub-investment companies, as well as owning their securities. The prohibition does not apply to non-residents of the United States, but they can themselves be sanctioned for material transactions with such companies.

Already in April many foreign companies began to refuse cooperation with UC Rusal one by one. Swiss trader Glencore warned about the risks of non-fulfillment of contracts for the supply of metal UC Rusal. Reuters reported, citing sources, that Japanese commodity traders had asked UC Rusal to stop shipment of aluminum and other products. The London Metal Exchange and the New York Mercantile Exchange on metals - Comex ceased trading in the aluminum of the Russian company.

Initially, the US Treasury gave international contractors UC Rusal two months to complete cooperation with the company, which fell under the sanctions. This led to a panic in the market - aluminum prices soared 24% to three-year highs. On April 18, 1 ton of aluminum was worth $ 2537 on the London Metal Exchange.

Later, US authorities announced that sanctions could be lifted if Deripaska refused to monitor the companies that were on the list, and also extended the deadlines for counterparties to terminate cooperation with UC Rusal and other structures of the businessman who were under sanctions until October 23.

The businessman is making attempts to get out of the sanctions. Chairman of the Board of Directors of En + (owns 48% of UC Rusal) and independent director Lord Gregory Barker has developed a plan to remove the company from sanctions. The document was submitted to the US Treasury at the end of July. The plan provides that Deripaska should reduce the stake in En + below the benchmark.

The plan became known from the message of the American company Mercury, engaged in lobbying. She proposes to temporarily exclude the company from sanctions or authorize transactions with its shares. Thanks to this, UC Rusal will be able to obtain Glencore's consent to convert the stake in the company into En + shares.

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