Page 185 - RusRPTSept21

up to 3.4% of shares outstanding, 28 April). The company’s cash generation in 1H21 was strong, reducing its net debt by over $1.5bn to $4.1bn, with ND/EBITDA at the end of 1H21 below 1.0x. RUSAL’s BoD recommended that the company not pay out dividends for 1H21 despite the strong inflow of cash, citing the uncertainty on the market at the moment.
Creation of Al+ currently on hold. Management informed us that the company had suspended the de-merging of its high-carbon assets and the creation of Al+. The primary reason was the uncertainty around the new export tax. The company expects its plans to resume once there is greater clarity with the export tax.
Investment in RusHydro remains strategic. Addressing investors’ questions, management commented on RUSAL’s recent purchase of a 4.35% stake in RusHydro, stating that the deal supported the company’s capital allocation strategy. We expect RUSAL to use this $240mn investment in its JV partner as a trading chip if it decides to buy out RusHydro’s share of the JV.
Outlook remains cautious. Management remains wary about the pricing environment and the company’s outlook for the rest of the year. The current spike in the aluminium price is due to a number of factors converging at the same time (e.g. supply shortages, deferred demand and the re-opening of the economy).
Russian metallurgy holding Metalloinvest reported 65% year on year growth in revenues to $5bn for 1H21 under IFRS, with Russia accounting for 37% of total revenues. Ebitda soared 175% y/y to $2.9bn, attributed to measures to improve operating efficiency. As reported by bne IntelliNews, Fitch Ratings has recently upgraded ratings on Metalloinvest to investment grade, ahead of the company’s possible IPO. In the reporting period Metalloinvest reached an all-time record Ebitda margin of 61% (up by 24.5%age points year on year) and showed net income jump of 308% y/y to $2.2bn.
En+’s management raised the company’s capex guidance for the energy segment from $350mn in 2021 to $400mn, after releasing its 2Q21 IFRS results and holding a conference call to discuss them 19 August. Moreover, the long-term capex guidance for the energy segment is now $400-450mn. The increase is due to higher metal prices and other components of the company’s investment program. In other words, the capex estimates have been affected by the higher-than-expected PPI. The capex
185 RUSSIA Country Report September 2021 www.intellinews.com