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UPDATE 1-Aluminium giant Rusal expects tough second half of year

Published 25/08/2016, 11:37 am
© Reuters.  UPDATE 1-Aluminium giant Rusal expects tough second half of year

* Q2 adjusted earnings just beat analyst forecasts

* Q2 adjusted earnings down nearly 40 pct on yr, up 10 pct on Q1

* Sees 1 mln tonne global aluminium deficit in 2016 (Adds CEO comment)

Aug 25 (Reuters) - Russian aluminium giant Rusal 0486.HK on Thursday reported a nearly 40-percent drop in second-quarter core earnings due to weak aluminium prices, slightly better than analysts feared, and warned the second half of the year would remain tough.

The company said it was focused on cutting debt to help weather tough markets and would continue to step up sales of value-added products, which it said made up nearly half its sales in the first half of 2016.

"Looking forward to the second half of the year, we believe that the aluminium industry will remain under pressure," Chief Executive Vladislav Soloviev said in a statement.

Rusal expects global aluminium demand to rise by 5.4 percent to 59.5 million tonnes in 2016, helped by housing and automotive growth.

That, combined with slower growth in aluminium production and falling Chinese exports of aluminium semi-finished products, would result in a global aluminium deficit of about 1 million tonnes in 2016, it said.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $344 million for the three months to June from $568 million a year earlier. However, the result was up 10 percent from the first quarter.

Six analysts on average had predicted adjusted EBITDA of $336 million. prices CMAL3 have risen about 11 percent since the start of 2016, but remain weak.

Net debt was trimmed slightly by June to $8.33 billion from six months earlier.

Rusal said its debt profile was helped by its recent agreement to sell its Alpart alumina refinery in Jamaica to China's state-owned Jiuquan Iron & Steel Group JISCO.UL for $299 million. deal further strengthened Rusal's relationship with our Chinese partners, which is expected to open new opportunities for future cooperation in other areas," the company said.

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