Subscribe free to our newsletters via your
. Energy News .

Russia's Rusal to cut production as profit falls
by Staff Writers
Hong Kong (AFP) Aug 27, 2012

Russian aluminium giant Rusal said Monday it would cut production after seeing its net profit fall 95.25 percent in the first six months of the year, hit by falling prices and rising costs.

The Hong Kong-listed company said net profit for the six months ending June 30 was $37 million, from $779 million a year earlier. Revenue fell 9.66 percent to $5.71 billion.

The world's biggest aluminium producer said it expects to cut up to 150,000 tonnes of aluminium production capacity by the end of 2012 to improve efficiency.

"During the first half of 2012, continuing financial problems in the eurozone and a slower-than-expected growth in emerging economies resulted in a further weakening of global economic recovery," Chief Executive Oleg Deripaska said in a statement.

"These challenging market conditions put a significant pressure on the aluminium industry, especially in the second quarter of 2012, leading to a sharp downturn in the price of aluminium," he added.

The aluminium price has slumped to close to its lowest level for three years on the London Metal Exchange, hitting a low of $1,810 a tonne at the end of June.

"The market conditions have warranted the company to introduce a series of cost-cutting measures to sustain its profitability," Deripaska said, adding these would be helped by the weaker ruble.

The efficiency drive would see the "curtailment of high-cost smelting capacity, with the possibility of idling the corresponding alumina production in order to achieve the production capacity balance".

Decommissioning of high-cost smelters would cut 150,000 tonnes of capacity by the end of the year and 275,000 tonnes to 2018.

Deripaska said that although global economic sentiment was expected to remain weak in the mid-term, there was "clear evidence of a stronger physical demand for aluminium, especially in North America and Asia".

Chairman Barry Cheung Chun-yuen said the spread of the eurozone crisis to Italy and Spain was "alarming".

"New lows in aluminium prices compounded with uncertainty as to when prices would rebound have made planning especially difficult," he said in the earnings report.

"As for the second half of 2012, uncertainty is likely to continue to cloud the global economic outlook."

Rusal in March reported a 91.7 percent drop in 2011 net profit, citing a write-down of its holding in the Norilsk Nickel miner and a steep fall in aluminium prices last year.

The company posted a net loss of $974 million for the fourth quarter of 2011 compared with a net profit of US$1.45 billion the previous year.

Rusal's share price slipped 0.23 percent to HK$4.34 at the close of trade on the Hong Kong exchange. The stock has lost more than 60 percent of its value over the past 12 months.


Related Links
Global Trade News

Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks DiggDigg RedditReddit GoogleGoogle

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

Trade to limit harm of East Asia island spats
Beijing (AFP) Aug 26, 2012
China, Japan and South Korea are loath to let tensions over sea claims damage their sputtering economies, analysts say, but the emotional disputes could still slow long-term trade integration efforts. Political and security tensions have flared this month due to the long-running territorial rivalries, which pit Japan against China in one and against South Korea in another. So far, fallou ... read more

India's Reliance Power and China Datang ink deal

Romney touts energy independence by 2020

Brazil speeds up to embrace smart meters

British energy price hike stirs anger

Military rescues 27 kidnapped oil workers in Nigeria: navy

Sky high methane mystery closer to being solved

Greenpeace intercepts Russian oil rig workers

Scientists produce H2 for fuel cells using an inexpensive catalyst under real-world conditions

Maximum Protection against Dust; Minimal Effort

US Wind Power Market Riding a Wave That Is Likely to Crest in 2012

Wind farms: A danger to ultra-light aircraft?

Off-shore wind power project considered

Novel technique to synthesize nanocrystals that harvest solar energy

As smart electric grid evolves, Virginia Tech engineers show how to include solar technologies

Australia leads in rooftop solar

First Light Technologies Lights up St. Pete Beach

Hundreds join anti-nuclear rally in Tokyo

ORNL technology moves scientists closer to extracting uranium from seawater

Glass offers improved means of storing UK's nuclear waste

Japan anti-nuke activists protest in Tokyo

Biorefinery makes use of every bit of a soybean

Warning issued for modified algae

Genetically Engineered Algae For Biofuel Pose Potential Risks That Should Be Studied

Argentina unhappy over EU biofuels curbs

China eyes next lunar landing as US scales back

China unveils ambitious space projects

Is China Going to Blast Past America in Space?

Hong Kong people share joy of China's manned space program

Carbon efficiency failing to fight warming: study

Past tropical climate change linked to ocean circulation

Drastic desertification

Forest Razing by Ancient Maya Worsened Droughts

The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement