(Adds quotes, analyst comment)
HONG KONG, March 28 Russian aluminium producer
United Company Rusal Plc posted a $3.2 billion loss
for 2013, hurt by lower prices and restructuring charges, and
said it was in still in talks to renegotiate part of its debt.
The result, which included a $1.9 billion charge for
impairment and one-off restructuring, compared with a $528
million loss in the previous year, the company said its results
statement on Friday. Revenue fell 10.4 percent to $9.77 billion.
Aluminium prices are trading around their lowest levels in
more than four years amid a global oversupply that has pushed
stocks of the metal in London Metal Exchange (LME) warehouses to
Rusal's earnings before interest, tax, depreciation and
amortisation (EBITDA) fell to $101 million, from $221 million
the previous year.
"EBITDA was a little below expectations, as the EBITDA
margin contracted," said equities analyst Andrew Driscoll from
Shares of Hong Kong-listed Rusal fell as much as 4 percent
after the result before rebounding to be down 1.5 percent.
Rusal, which won a court ruling on Thursday derailing LME
plans to cut logjams in warehouses, said the average LME
aluminium price fell 8.6 percent in 2013 to $1,845 per tonne.
The company's aluminium output fell nearly 8 percent in 2013
to 3.857 million tonnes due to the curtailment of inefficient
Rusal, which has been in talks on restructuring its debt of
about $10 billion, said it has completed restructuring
negotiations with state lender Sberbank on $4.9
billion of debt and Gazprombank on $660 million.
It was in advanced talks on $3.7 billion of PXF facilities
but expected to breach certain covenants, resulting in a
default, as the talks were expected to continue past the expiry
of a covenant holiday on March 31.
Rusal said in Friday's statement that the management
believed the facilities would be renegotiated "in due course"
and it should have sufficient liquidity to meet its obligations
as they fall due.
It had also secured additional financing from a major
customer and identified non-core assets it could sell if
aluminium prices fell further.
"Rusal owes international lenders about $2.6 billion and to
the Russian lenders about $1 billion," Rusal's chief financial
officer Alexandra Bouriko told a conference call.
"The company is finalizing amendments to these facilities,
with the objective to obtain approval from the lenders before
March 31," she said.
"We believe that with the conclusion of refinancing, it will
allow the company to maintain a sustainable cash position in
anticipation of the market rebound."
Rusal said it expected global demand for aluminium to trend
upward, with demand expected to grow 6 percent to 55 million
tonnes in 2014.
Outside of China, it forecast a deficit of 1.3 million
tonnes in the global aluminium market in 2014, from a deficit of
455,000 tonnes in 2013. That could support premiums of aluminium
as the physical market remains tight and financial demand for
the metal stays robust.
Physical premiums reached record highs in end-2013 and the
rise has continued into 2014 with the U.S. Mid-west at 20
cents/lb and Rotterdam $275-$315 per tonne in January, Rusal
The premium is paid by buyers on top of the London Metal
Exchange cash aluminium price to secure physical metal .
In Asia, premiums for spot aluminium were currently at $340-$360
per tonne, traders said.
China, the world's top aluminium consumer and producer, was
expected to cut production by about 3 million tonnes in 2014 and
the Chinese market should be in balance this year, Rusal said.
Analysts polled by Reuters in January predicted a surplus in
the global aluminium market, including China, tightening to
568,400 tonnes this year and 500,000 tonnes in 2015.
(Reporting by Polly Yam and Polina Devitt in MOSCOW; Additional
reporting by James Pomfret and the Hong Kong bureau; Editing by