* Q3 recurring net loss $76 mln vs f'cast $35 mln loss
* Q3 adjusted EBITDA $130 mln vs $705 mln a year ago
* Expects demand to pick up in Q4, lifted by China rebound
By Alison Leung
HONG KONG, Nov 12 Russia's United Company RUSAL
Plc, the world's top aluminium producer, said it
expected orders to pick up towards the year-end due to a rebound
Tepid demand for aluminium in an oversupplied market has
weighed on producers including Aluminum Corp of China Ltd
. Prices have slumped 10 percent over the
last 12 months and led RUSAL to report its biggest quarterly
recurring net loss since its listing in 2010.
The outlook may improve from the final quarter of the year.
RUSAL signalled a pick-up in China, the world's biggest consumer
of aluminium, citing market speculation that the government will
support infrastructure building and start stockpiling as it did
in 2008 and 2009.
The company controlled by Russian billionaire Oleg Deripaska
said it was optimistic thanks also to growing North American
demand for the metal, used in drink cans, aircraft and iPads.
"This will be largely driven by a Chinese rebound in growth,
a resilient USA automotive sector as well as new monetary
stimulation steps taken by global central banks to support
global economic growth and financial markets," RUSAL said.
RUSAL said China was expected to remain the largest growing
market this year at 9 percent, followed by India at 7 percent
and North America at 6 percent.
China said on Saturday it is effectively turning the corner
on the economy and likely to meet its growth target for the year
as a slowing trend had halted.
RUSAL revised down its Japanese consumption growth forecast
for 2012 to 3 percent from 5 percent due to a drop in exports to
Europe and the recent row between Tokyo and Beijing over
disputed islands which it said had weighed on Japanese car
Shares in the company, which have dropped nearly 60 percent
since their IPO price of HK$10.80 in 2010, were flat in Hong
Kong trade on Monday.
The market value of the company has declined by about 27
percent to $8.7 billion over the past 12 months.
EARNINGS LAG FORECASTS
Despite RUSAL's market-leading position, the weak operating
environment has heaped pressure on the company, which is
embroiled in a shareholder battle over its stake in Russian
miner Norilsk Nickel.
Controlling shareholder Deripaska has resisted calls to
dispose of RUSAL's 25 percent share in Norilsk Nickel to pay
down debts at a time when aluminium markets are weak.
RUSAL has net debt of $10.85 billion, partly stemming from
the purchase of the stake in 2008 for an estimated $14 billion.
It has negotiated covenant holidays lasting until the end of
For the three months ended September, RUSAL
posted a recurring net loss of $76 million, lagging the average
forecast for a $35 million loss in a Reuters poll of nine
analysts. That compares with a recurring net profit of $620
million a year earlier.
RUSAL on Monday also revised down slightly its 2012 global
primary aluminium consumption forecast to 47.3 million tonnes
from 47.5 million tonnes.
"The numbers reflected just how challenging an operating
environment it is for the industry at the moment," said Andrew
Driscoll, analyst at CLSA.
"We will have some strengthening in pricing towards year-end
and you will expect to see some margin expansion on the prices."
Recurring net profit is defined as adjusted net profit plus
the company's net effective share in the results of Norilsk
RUSAL made a net loss of $118 million in the
three-month period against a $432 million profit a year earlier.
It reported an adjusted net loss of $248 million versus a
profit of $351 million a year ago.
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA), which indicates a company's ability to
pay back what it owes, dropped 82 percent to $130 million.
That lagged an average forecast of $138 million, according
to the Reuters poll.