(Adds Taishet project resumption, context on En+'s possible
May 12 Russian aluminium giant Rusal
posted higher first-quarter recurring net profit on Friday amid
stronger aluminium prices and said it was preparing to resume
construction of its aluminium smelter in Siberia.
Russian tycoon Oleg Deripaska controls 48 percent of Rusal
through his En+ Group, which also manages his hydro power
businesses. En+ may raise $2 billion in IPO in London and Moscow
in June, sources familiar with the deal have said.
Hong Kong-listed Rusal, the world's second largest aluminium
producer, reported first quarter recurring net profit of $434
million, up from $149 million a year earlier, thanks to higher
prices and volumes of sales.
Global demand for aluminium continued to grow in the first
quarter of 2017, led by the transportation sector, while supply
is expected to tighten in the second half, it added.
In a separate statement on Friday, Rusal announced that it
had proposed the resumption of construction of its long-standing
Taishet aluminium smelter.
Its board of directors has already approved the
$38.5-million financing of works at the smelter in 2017, it
"While the funding is relatively small, the capacity is
unlikely to come on stream in the near term," analysts at Citi
said in a note.
Rusal, which started building this smelter in 2007 but then
delayed it when aluminium prices fell, told Reuters that it was
still in talks with banks and its partner Russian power
generator Rushydro to organise the financing for
In 2016, Rusal said it was negotiating the $800-million of
the project financing and to build 430,000 tonnes of annual
capacity there by the end of 2018.
A source who attended meetings between En+ management and
analysts previously told Reuters that En+ hopes that Rusal's two
brownfield projects - Taishet and another Boguchansk smelter in
Siberia - would raise their capacity by one million tonnes of
aluminium in 3-5 years, boosting En+'s EBITDA.
En+'s 2016 EBITDA (adjusted earnings before interest,
taxation, depreciation and amortisation) reached $2.3 billion.
Rusal accounted for $1.5 billion of that sum, and EN+'s other
businesses - power operations, coal mining and logistics -
accounted for $822 million.
Rusal's shares rose 1.6 percent in Hong Kong on Friday,
against a 0.1-percent growth in benchmark index.
Rusal estimated demand grew 5.5 percent year on year to 15
million tonnes in the first quarter. Over the same period,
global supply was up 7.8 percent to 14.9 mln tonnes, signalling
a market roughly in balance, according to the company.
(Reporting by James Regan and Polina Devitt; Editing by Sonali
Paul and Keith Weir)