The world's top aluminum maker, Rusal of Russia, has reported an unparalleled drop in net profit for 2011. But it hopes that growing demand in emerging markets will get the firm out of the doldrums again.
Aluminum maker Rusal of Russia on Monday reported a 91.7-percent drop in net profit for 2011. The Moscow-based company attributed the decrease to a large-scale writedown of its holding in the Norilsk Nickel mining firm and a steep drop in aluminum prices.
Rusal's net profit last year totaled $237 million (189 million euros), following a fourth quarter in which it lost $974 million, compared to a net profit of $1.45 billion over the same period in the previous year.
But Rusal's managers tried to put a positive spin on the 2011 figures. "Despite the deterioration of the global economy during the second half of last year, ongoing cost pressures across the whole commodities sector and a particularly challenging fourth quarter in 2011, Rusal delivered a solid financial performance during the year," Chief Executive Oleg Deripaska said in a statement.
Emerging markets to the rescue?
Deripaska added that the current global economic volatility would continue to put pressure on aluminum prices in the near term. "But global aluminum demand remains well above 2009 recession levels, and we anticipate that the rising influence of developing countries will ensure demand remains robust throughout 2012," Deripaska argued.
The world's largest aluminum maker was rocked last week when board member Victor Vekselberg resigned unexpectedly. He threatened to sue Rusal for alleging that he failed to perform his assigned duties on the board of the company.
Vekselberg warned in his resignation statement that the company was facing a deep crisis and he made clear his disapproval of Rusal's appointment of Hong Kong Mercantile Exchange Head Barry Cheung as his replacement.
hg / mll (AFP, Reuters)