United Company RUSAL Plc: Results Announcement for the Three Months Ended 31 March 2013 Business Wire HONG KONG -- May 14, 2013 Regulatory News: Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. UNITED COMPANY RUSAL PLC (Paris:RUSAL) (Paris:RUAL) (Incorporated under the laws of Jersey with limited liability) (Stock Code: 486) Key highlights of the quarter ended 31 March 2013 *Primary aluminium production in the first quarter of 2013 decreased by 4.0% (or by 42 thousand tonnes) to 1,007 thousand tonnes compared to the first quarter of 2012 or by 3.0% (or by 31 thousand tonnes) compared to the fourth quarter of 2012 reflecting the launch of capacity curtailments program and was mostly attributable to the decreased production at certain less efficient smelters located in European part of Russia and Urals. *Share of value-added products output increased to 40% of total aluminium production in comparison with 37% for the first quarter or with 39% for the fourth quarter of the previous year. *Revenue in the first quarter of 2013 increased to USD2,682 million (by 2.2%) as compared to USD2,624 million for the fourth quarter of 2012 due to historically high premiums over LME aluminium price of USD264 per tonne and improvement of the product mix offsetting a 1.7% decrease in physical aluminium sales while the metal price on LME was almost flat as compared with the last quarter of the preceding year. *Aluminium segment cost per tonne in the first quarter of 2013 increased by 1.9% to USD1,971 per tonne as compared to USD1,934 per tonne in the fourth quarter of 2012 (and was flat as compared with the level of the first quarter of 2012) following 2.3% Russian Ruble appreciation. *Adjusted EBITDA comprised USD246 million for the first quarter of 2013 with a margin of 9.2% demonstrating an increase of 11.3% as compared to the fourth quarter of 2012 in line with the industry best producers reflecting stronger revenue and lower operating expenses despite negative effect from appreciating local currency. Aluminium segment EBITDA margin improved to 14.3% in the first quarter of 2013 as compared to 12.7% for the last quarter of 2012. *In the first quarter of 2013 the Company made repayments to international and Russian lenders in the amount of USD483 million. In April 2013 the Company completed the sale of Norilsk Nickel shares to Millhouse according to the shareholder agreement signed in December 2012. The net proceeds in the total amount of USD620 million were applied towards the prepayment of debt owed to Sberbank. *The Company is on track with its BEMO project. BEMO HPP started hydropower capacity sales to the free market from March 1st, 2013. BEMO smelter’s first metal is expected to be produced in the third quarter of 2013. Statement of the CEO Despite continued weakness in global aluminium prices and unfavorable market developments, RUSAL delivered a set of improved quarter-on-quarter financial results in the first three months of 2013. Our top-line increased to USD2,682 million, up 2.2% from the fourth quarter last year, while EBITDA grew by 11.3% to USD246 million in the same period reflecting record-high realized premiums and further improvements to our product portfolio. This solid set of results came in spite of a drop in RUSAL’s aluminium output by 42 thousand tonnes in the first quarter, or approximately by 150 thousand tonnes on an annualized basis, following the Company’s responsible approach to production cuts. The rationalization of production and a desire to help reach the balance of supply and demand, remain at the forefront of RUSAL’s business development plans, as a leading aluminium producer. As such, the Board announced its decision in the period to further reduce annual production volume and exports by 300 thousand tonnes from the last year’s level and maintain it at this level for the next three years. Our long-term rebalancing strategy taking place in the Western part of our Russian least efficient operations remains on track. We believe this approach needs to be adopted across the whole industry, to move it away from its present unsustainable position characterized by excessive warehouse stocks. Looking beyond the first quarter, the Company is pleased to report that, following the Norilsk Nickel’s shareholders’ agreement, in April first debt prepayments were made utilizing the respective proceeds from the deal. Going forward, RUSAL’s investment in Norilsk Nickel will continue to bring significant returns and provide strong support for the Company’s deleveraging. While industry conditions as well as the wider macroeconomic environment remain volatile, RUSAL maintains its 6% consumption growth outlook for 2013 with strong demand expected in the US and in particular Asia as a result of growth in the aerospace, automotive and electrical sectors. RUSAL also believes there to be significant opportunities across the Russian and CIS markets and will work towards enhancing the aluminium consumption in the region and increasing domestic sales. Oleg Deripaska CEO 14 May 2013 Financial and Operating Highlights^1 Change Change Quarter ended 31 quarter Quarter quarter March on ended 31 on quarter, December quarter, % % 2013 2012 (1Q to 2012 (1Q to 1Q) 1Q) unaudited unaudited unaudited Key operating data (‘000 tonnes) Aluminium 1,007 1,049 (4.0%) 1,038 (3.0%) Alumina 1,811 2,034 (11.0%) 1,806 0.3% Bauxite 2,809 3,622 (22.4%) 2,788 0.8% Key pricing and performance data (‘000 tonnes) Sales of primary 994 1,095 (9.2%) 1,011 (1.7%) aluminium and alloys (USD per tonne) Aluminium segment cost 1,971 1,963 0.4% 1,934 1.9% per tonne^2 Aluminium price per 2,003 2,177 (8.0%) 1,997 0.3% tonne quoted on the LME^3 Average premiums over 264 165 60.0% 249 6.0% LME price Average sales 2,306 2,284 1.0% 2,222 3.8% price Alumina price 340 316 7.6% 326 4.3% per tonne^4 Key selected data from the consolidated interim condensed statement of income (USD million) Revenue 2,682 2,882 (6.9%) 2,624 2.2% Adjusted 246 237 3.8% 221 11.3% EBITDA margin (% of 9.2% 8.2% NA 8.4% NA revenue) Net Profit/(Loss) 19 56 (66.1%) (411) NA for the period margin (% of 0.7% 1.9% NA (15.7%) NA revenue) Adjusted Net Loss for the (47) (90) (47.8%) (138) (65.9%) period margin (% of (1.8%) (3.1%) NA (5.3%) NA revenue) Recurring Net Profit/(Loss) 52 94 (44.7%) (151) NA for the period margin (% of 1.9% 3.3% NA (5.8%) NA revenue) ^1 Certain information for the quarter ended 31 March 2012 is inconsistent with the respective information set out in the Company’s Results Announcement for the three months ended 31 March 2012 dated 11 May 2012 due to the restatement made after the release of Norilsk Nickel 2012 interim financial statements in October 2012. Also certain information for the quarter ended 31 December 2012 is inconsistent with the respective information set out in the Company’s Update of the Annual Results announcement for the year ended 31 December 2012 dated 15 April 2013 due to change in accounting policy. For details, please refer to page 16 of this Announcement. ^2 For any period, “Aluminium segment cost per tonne” is calculated as aluminium segment revenue less aluminium segment results less amortisation and depreciation divided on sales volume of the aluminium segment. ^3 Aluminium price per tonne quoted on the LME represents the average of the daily closing official London Metals Exchange (“LME”) prices for each period. ^4 The average alumina price per tonne provided in this table is based on the daily closing spot prices of alumina according to Non-ferrous Metal Alumina Index FOB Australia USD per tonne. Key selected data from consolidated interim condensed statement of financial position As at Change 31 March 31 December quarter on 2013 2012 year end,% (unaudited) (USD million) Total assets 24,768 25,210 (1.8%) Total working capital^5 1,928 1,893 1.8% Net Debt^6 10,968 10,829 1.3% Key selected data from consolidated interim condensed statement of cash flows Quarter ended Change quarter on 31 March 31 March quarter,% 2013 2012 (1Q to 1Q) (unaudited) (unaudited) (USD million) Net cash flows generated 84 350 (76.0%) from operating activities Net cash flows used in (88) (121) (27.3%) investing activities of which CAPEX^7 (110) (126) (12.7%) Interest paid (148) (151) (2.0%) ^5 Total working capital is defined as inventories plus trade and other receivables minus trade and other payables. ^6 Net Debt is calculated as Total Debt less cash and cash equivalents as at the end of any period. Total Debt refers to UC RUSAL’s loans and borrowings and bonds outstanding at the end of any period. ^7 CAPEX is defined as payment for the acquisition of property, plant and equipment and intangible assets. Overview of trends in industry and business Aluminium industry for the three months ended 31 March 2013 According to UC RUSAL’s estimates, global primary aluminiuim consumption reached 12 million tonnes in the first quarter of 2013, a 6% increase compared to the respective period of 2012. The largest growth markets in the period were China (11%), South East Asia (9%) and India (7.4%). Concerning developed markets, consumption in North America grew by 2.1% whereas consumption in Europe remained flat despite 8.5% demand growth in Turkey. In Japan, aluminum consumption for the period contracted by 8%. Despite starting the year with a positive aluminum outlook, negative investor sentiment towards commodity markets and the slow growth of the global economy, continued to move the price on LME down to an average of USD2,003 per tonne during the first quarter of 2013, an 8% decrease compared to the same period in 2012. North America Aluminium demand in North America increased by 30 thousand tonnes in the first quarter of 2013 compared to the first quarter of last year to 1.425 million tonnes. The transportation sector remained the main driver of consumption growth in the region due to a combination of an increase in automotive production to 3.7 million vehicle during the first quarter of 2013 or 6% increase year-on-year and further penetration of aluminum in the car industry, now representing over 140 kg per vehicle. A steady recovery in the USA’s building and construction sector was evidenced with housing starts and new permits rising to their highest levels since 2008. In March new housing builds reached 1.04 million units with a 33% increase year-on-year. Migration of manufacturing to Mexico as a low cost production center continued to draw metal into the region with demand growth of 17 thousand tonnes in the first quarter of 2013, up by 14% year-on-year. The underlying physical demand for aluminum was reflected in an improvement in the Midwest premium during the quarter, which rose from 11.00cents/lb in January to 11.45 cents/lb in March. Europe The first quarter of 2013 represented a period of weak demand for European economies. European new car sales fell by 10.2% in March 2013 from a year ago at 1.3 million vehicles, continuing a decline that has lasted 18 consecutive months. Germany, the leader of European automotive industry, registered an 11% contraction in automotive output year-on-year. The Eurozone production index for construction also failed to improve in the first quarter of 2013, falling by 9% in the period. The poor underlying fundamentals in the building and construction markets, influenced by reduced government spending, had a direct impact in the output of flat rolled products and extrusions in the region. The only bright picture for the region was the Turkish market which aluminium consumption grew by 18 thousand tonnes, or 9%, year—on-year supported by developments in the automotive industry and construction. However this was insufficient to offset the demand contraction of 12 thousand tonnes across the rest of Europe. As a result of weaker aluminium demand and a growth in warehouse stocks, the regional duty-unpaid premium for primary aluminium ingots declined in February and March from USD210 — 233 per tonne to USD200 — 215 per tonne. Ex-China Asia An increase in manufacturing capacity that is taking place in Indonesia, Malaysia and Thailand supported domestic underlying aluminium consumption in the first quarter of 2013 with the ASEAN countries in particular reporting growth of 72 thousand tonnes year-on-year. Construction activity growth in ASEAN countries was led by infrastructure development and housing starts with the preliminary in the first quarter of 2013 construction growth forecast to be close to 7%. Other growth drivers included an increase in automotive production especially in Thailand, whereas in Indonesia the Government continues to invest in power grids as it aims to supply 90% of the population with electricity by 2019. Aluminium consumption in Japan was mixed. Housing starts in Japan rose by 7% in the first quarter of 2013 compared to the same period of preceding year; however auto sales fell sharply, decreasing by 14% in the period. Overall primary aluminium consumption contracted by 8% year-on-year, to 483 thousand tonnes. In India, demand for housing, retail and office space grew rapidly due to the increase of urbanisation ratio which now stands at 30%. Federal investments to infrastructure projects support the use of aluminium in the electrical and railway sectors. Premiums in Asia as reflected by the CIF MJP indicator remained firm and grew through the first quarter of 2013 from USD240-245 per tonne in January to USD248-249 per tonne in March on the basis of regional demand growth, coupled with an expectation of curtailed supply from India and Oceania. China In China, aluminum consumption during the first quarter of 2013 continued to be very strong and rose by 11% quarter-on-quarter as compared with the first quarter of 2012. Automotive output also saw strong growth in the period, up by 12.81% year-on-year, amounting to 5.4 million units according to the Chinese Association of Automobile Manufacturers (CAAM). The overall floor space under construction for all real estate enterprises was 4.78950 billion square meters between January and March 2013, a quarter-on-quarter growth of 17.0% as compared with the corresponding period of 2012. Continued growth of investments into fixed assets and infrastructure, as well as strong domestic consumption, compensates some weak export volumes experienced due to falling demand in some parts of Europe. At the same time domestic aluminum overproduction and rising aluminum stocks were reflected in a weak SHFE aluminum price with 38% of Chinese aluminum production becoming unprofitable and approximately 780 thousand tonnes of aluminum production was cut in China during this period. New production capacity, mainly in Xinjiang, of around 810 thousand tonnes was commissioned in the first quarter of 2013 and therefore Chinese aluminum production continues to grow. Overall we expect the Chinese market to become more balanced in 2013 as we expect loss making and obsolete capacity to be curtailed and the commissioning of new capacity to be slower than expected due to low aluminum price and large domestic stocks. Investor sentiment towards the commodity markets became negative as a result of lower Chinese growth in the first quarter of 2013 and structural oversupply. Concurrently 57% of LME aluminum inventories are tied up in financials deals and it is forecast that the positive aluminium forward curve and low financial costs will see investors continuing to buy aluminium for near term delivery and making a forward sale to support the price. Aluminium industry 2013 outlook UC RUSAL´s 2013 market outlook, remains broadly unchanged with some improvement to EU consumption. Consumption of primary aluminium globally is forecasted to reach 50 million tonnes, an increase of 6%, with China remaining as the largest growing market with an expected 9.5% growth, followed by India (6% growth), Asia excluding China (5.8% growth), North America (5% growth) and Russia & CIS (4% growth). The consumption level in Europe for 2013 is expected to be 1% lower than in 2012 (up from previous forecasts of a 2% decrease). Therefore, UC RUSAL forecasts the 2013 global aluminium market to be largely balanced. Business review Aluminium production Primary aluminium production for the quarter ended 31 March 2013 reached 1,007 thousand tonnes demonstrating a decrease of 4.0% (or by 42 thousand tonnes) compared to 1,049 thousand tones for the first quarter of 2012. This dynamics reflects the launch of capacity curtailments program and was mostly attributable to the decreased production at certain smelters located in European part of Russia and Urals, in particular, Bogoslovsk Aluminium Smelter. Alumina production Alumina output for the quarter ended 31 March 2013 amounted to 1,811 thousand tonnes demonstrating a decrease of 11.0% compared to 2,034 thousand tonnes for the first quarter of 2012. The reduction was predominantly attributable to Friguia Alumina Refinery (Guinea) with operations interrupted in April 2012. Bauxite production Bauxite production for the quarter ended 31 March 2013 was 2,809 thousand tonnes as compared to 3,622 thousand tonnes for the first quarter of 2012, demonstrating a 22.4% reduction. The main factor of this decrease over the reported periods was reduced mining operations at Friguia Alumina Refinery (Guinea). Financial Overview Revenue Change Change Quarter ended quarter Quarter quarter 31 March on ended 31 on quarter, December quarter, % % 2013 2012 (1Q to 2012 (1Q to 4Q) 4Q) (unaudited) (unaudited) (unaudited) (USD million) Sales of primary aluminium and alloys USD 2,292 2,501 (8.4%) 2,246 2.0% million kt 994 1,095 (9.2%) 1,011 (1.7%) Average sales 2,306 2,284 1.0% 2,222 3.8% price (USD/t) Sales of alumina USD 141 147 (4.1%) 89 58.4% million kt 425 450 (5.6%) 283 50.2% Average sales 332 327 1.5% 314 5.7% price (USD/t) Sales of foil (USD 78 63 23.8% 82 (4.9%) million) Other revenue 171 171 0.0% 207 (17.4%) (USD million) Total revenue 2,682 2,882 (6.9%) 2,624 2.2% (USD million) Revenue decreased by USD200 million or 6.9% to USD2,682 million in the quarter ended 31 March 2013, as compared to USD2,882 million for the corresponding period of 2012. Revenue from sales of primary aluminium and alloys decreased by USD209 million, or by 8.4%, to USD2,292 million in the first quarter of 2013, as compared to USD2,501 million for the same period of 2012. This decrease resulted primarily from the decline in the LME aluminium price (which decreased to an average of USD2,003 per tonne from USD2,177 per tonne for the three months ended 31 March 2013 and 2012, respectively) as well as from a 9.2% decrease in volumes of the primary aluminium and alloys sold. The decrease in average LME aluminium prices was slightly offset by a 60.0% growth in premiums above the LME price in the different geographical segments (to an average of USD264 per tonne from USD165 per tonne for the three months ended 31 March 2013 and 2012, respectively). Revenue from sales of alumina decreased by 4.1% to USD141 million in the quarter ended 31 March 2013 as compared to USD147 million for the corresponding period of 2012, due to a 5.6% decrease in alumina sales volume which was slightly offset by a 1.5% growth in average sales price. Revenue from sales of foil increased by 23.8% to USD78 million in the first quarter of 2013, as compared to USD63 million for the corresponding period in 2012, primarily due to an increase in foil sales volume. Revenue from other sales, including sales of other products, bauxite and energy services were almost flat during the first quarter of 2013 as compared to the same period of 2012. Cost of sales The following table demonstrates the breakdown of UC RUSAL’s cost of sales for the quarters ended 31 March 2013 and 2012: Quarter ended Change Share 31 March quarter of on costs, 2013 2012 quarter, % % (unaudited) (unaudited) (USD million) Cost of 289 339 (14.7%) 12.8% alumina Cost of 138 158 (12.7%) 6.1% bauxite Cost of other raw materials 767 866 (11.4%) 34.1% and other costs Energy costs 673 676 (0.4%) 29.9% Depreciation and 127 131 (3.1%) 5.6% amortisation Personnel 234 241 (2.9%) 10.4% expenses Repairs and 24 30 (20.0%) 1.1% maintenance Change in asset — (1) 100.0% — retirement obligations Net change in provisions for (2) 17 NA 0.0% inventories Total cost of 2,250 2,457 (8.4%) 100.0% sales Total cost of sales decreased by USD207 million, or 8.4%, to USD2,250 million for the first quarter of 2013, as compared to USD2,457 million for the corresponding period in 2012. The decrease was primarily driven by the 9.2% (or 101 thousand tonnes) reduction in the aggregate aluminium sales volumes. Lower volumes and 7% reduction in prices of externally purchased bauxite as well as lower raw materials purchase prices (such as petroleum coke for 11%, fuel oil for 9%, anode blocks for 1%) also contributed to the decrease in the cost of sales that was partially compensated by the 15% increase in the weighted average power tariff. Gross profit As a result of the foregoing factors, UC RUSAL reports a gross profit of USD432 million for the quarter ended 31 March 2013 compared with USD425 million for the same period of 2012, representing gross margins over the periods of 16.1% and 14.7%, respectively. Adjusted EBITDA and Results from operating activities Change Change Quarter ended quarter Quarter quarter 31 March on ended on quarter, 31 quarter, % December % 2013 2012 (1Q to 2012 (1Q to 1Q) 4Q) (USD million) (unaudited) (unaudited) (unaudited) Reconciliation of Adjusted EBITDA Results from operating 64 74 (13.5%) 29 120.7% activities Add: Amortisation and 134 138 (2.9%) 135 (0.7%) depreciation Impairment of non-current 47 25 88.0% 56 (16.1%) assets Loss on disposal of property, 1 — 100.0% 1 0.0% plant and equipment Adjusted 246 237 3.8% 221 11.3% EBITDA Adjusted EBITDA, defined as results from operating activities adjusted for amortisation and depreciation, impairment charges and loss on disposal of property, plant and equipment, increased to USD246 million during the quarter ended 31 March 2013, as compared to USD237 million for the corresponding period of 2012. The factors that contributed to the increase in Adjusted EBITDA margin were the same that influenced the operating results of the Company. Results from operating activities decreased in the first quarter of 2013 by 13.5% to USD64 million, as compared to USD74 million for the corresponding period of 2012, representing operating margins of 2.4% and 2.6%, respectively. The decrease in margins resulted mainly from the decrease in the LME aluminium prices by 8.0% as well as from a 9.2% decrease in volumes of the primary aluminium and alloys sold. Finance income and expenses Quarter ended 31 March Change, % (USD million) 2013 2012 (unaudited) (unaudited) Finance income Interest income on loans 3 4 (25.0%) and deposits Foreign exchange gain 33 — NA Change in fair value of derivative financial 5 — NA instruments, including Change in fair value of 2 — NA embedded derivatives Change in other 3 — NA derivatives instruments Interest income on 1 4 (75.0%) provisions 42 8 425.0% Finance expenses Interest expense on bank loans and company loans wholly repayable within (191) (163) 17.2% five years, bonds and other bank charges, including Nominal interest expense (168) (146) (15.1%) Bank charges (23) (17) 35.3% Foreign exchange loss — (38) NA Change in fair value of derivative financial — (43) NA instruments, including Change in fair value of — (42) NA embedded derivatives Revaluation of financial instruments linked to the — 1 NA share price of Norilsk Nickel Change in other — (2) NA derivatives instruments Interest expense on (6) (4) 50.0% provisions (197) (248) (20.6%) Finance income increased by USD34 million to USD42 million in the quarter ended 31 March 2013 as compared to USD8 million for the corresponding period of 2012, due to the net foreign exchange gain and gain from the revaluation of financial instruments for the quarter ended 31 March 2013 as compared to the respective losses for the same period of the previous year. Finance expenses decreased by USD51 million to USD197 million in first quarter ended 31 March 2013 as compared to USD248 million for the corresponding period in 2012 due to the positive effect of the net foreign exchange results over the quarter ended 31 March 2012. Interest expenses on bank and company loans increased by USD22 million to USD168 million for the reporting period as compared to the USD146 million for the same quarter of the previous year primarily due to the higher interest rate margins and negative effect of interest rate swap. Change in the fair value of derivative financial instruments comprised net gain of USD5 million for the first quarter of 2013 as compared to the net loss of USD 44 million for the same period of 2012 due to the positive effect of the lower LME aluminium prices in the quarter ended 31 March 2013. Foreign exchange results of USD33 million gain in the first quarter of 2013 and USD38 million loss in the first quarter of 2012 were driven by changes in working capital items of several Group companies denominated in currencies other than their functional one due to fluctuations in the exchange rate between the Russian Ruble and the US dollar. Share of profits/(losses) of associates and jointly controlled entities Quarter ended 31 March (USD million) 2013 2012 Change, % (restated) (unaudited) (unaudited) Share of profits of 99 225 (56.0%) Norilsk Nickel, with Effective shareholding of 27.83% 30.27% NA Share of losses of other (10) (5) 100.0% associates Share of profits of 89 220 (59.5%) associates Share of profits of jointly controlled 25 23 8.7% entities Share of profits of associates was USD89 million in the quarter ended 31 March 2013 and USD220 million for the corresponding period in 2012. Share in results of associates in both periods resulted primarily from the Company’s investment in Norilsk Nickel, which amounted to profit of USD99 million and USD225 million for the quarter ended 31 March 2013 and 2012, respectively. As stated in Note 11 to the consolidated interim condensed financial information for the three months period ended 31 March 2013, as of the date of the consolidated interim condensed financial information, the consolidated interim financial information of Norilsk Nickel for the three months period ended 31 March 2013 was not available to the Company and as a result, the Company estimated its share in the profits and other comprehensive income of Norilsk Nickel based on latest publicly available information reported by Norilsk Nickel. The information used as a basis for these estimates is incomplete in many aspects. Once the consolidated interim financial information for Norilsk Nickel becomes available, it will be compared to management´s estimates. If there are significant differences, adjustments may be required to restate the Group´s share in profit, other comprehensive income and the carrying value of the investment in Norilsk Nickel which has been previously reported. The market value of UC RUSAL’s stake in Norilsk Nickel was USD8,082 million including shares classified as held-for-sale as at 31 March 2013, as compared to USD8,859 million for as at 31 December 2012 due to a negative share price performance between the relevant dates. Share of profits of jointly controlled entities was USD25 million in the first quarter of 2013 as compared to USD23 million for the same period in 2012. This represents the Company’s share of results in the Company’s joint ventures — BEMO, LLP Bogatyr Komir, Mega Business and Alliance (transportation business in Kazakhstan) and North United Aluminium Shenzhen Co., Ltd (“North United Aluminium”). Net profit for the period As a result of the above, the Company recorded a net profit of USD19 million for the quarter ended 31 March 2013, as compared to USD56 million for the same period of 2012. Adjusted and Recurring Net Profit/(Loss) Change Change Quarter ended quarter Quarter quarter 31 March on ended on quarter, 31 December quarter, % % 2013 2012 (1Q to 2012 (1Q to 1Q) 1Q) (USD million) (unaudited) (unaudited) (unaudited) Reconciliation of Adjusted Net Profit/(Loss) Net profit for 19 56 (66.1%) (411) N/A the period Adjusted for: Share of profits and other gains and losses (99) (185) (46.5%) 4 N/A attributable to Norilsk Nickel, net of tax effect (9.0%), with Share of profits, net (99) (184) (46.2%) 13 N/A of tax Revaluation of financial instruments linked to the — (1) (100.0%) (9) (100.0%) share price of Norilsk Nickel Change in fair value of embedded derivative (14) 14 N/A 22 N/A financial instruments, net of tax (20.0%) Impairment of non-current 47 25 88.0% 247 (81.0%) assets, net of tax Adjusted Net (47) (90) (47.8%) (138) (65.9%) Loss Add back: Share of profits of Norilsk 99 184 (46.2%) (13) N/A Nickel, net of tax Recurring Net 52 94 (44.7%) (151) N/A Profit/(Loss) Adjusted Net Profit for any period is defined as the net profit adjusted for the net effect of the Company’s investment in Norilsk Nickel, the net effect of embedded derivative financial instruments, the excess of effective interest rate charges over nominal interest rate charges on restructured debt and the net effect of non-current assets impairment. Recurring Net Profit for any period is defined as Adjusted Net Profit plus the Company’s net effective share in Norilsk Nickel results. Restatement of previously issued interim condensed financial information and change in accounting policy Correction of financial information On 11 May 2012, the Group issued interim condensed financial information as at and for the three-month period ended 31 March 2012. At that date the Group was unable to obtain consolidated IFRS interim financial information of the Group’s significant equity investee, OJSC MMC Norilsk Nickel, as at and for the three-month period ended 31 March 2012. Consequently management estimated the Group’s share in the profits and comprehensive income of this investee for the three-month period ended 31 March 2012 based on information that was publicly available at that time. On 12 October 2012 OJSC MMC Norilsk Nickel published its unaudited financial information prepared in accordance with IFRS as at and for the six-month period ended 30 June 2012. Management has used this information to reassess the Group’s share in the profits and other comprehensive income of the investee and compare these amounts to their previous estimates. As a result of this comparison, management has concluded that the Group’s share of profits and other comprehensive income of associates for the three-month period ended 31 March 2012 as well as the carrying amount of the Group’s interests in associates as at 31 March 2012 reported in the Group’s interim condensed financial information issued on 11 May 2012 required restatement. The adjustments made to that financial information are detailed in the table below: Three months ended 31 March 2012 Previously Adjusted reported Restatement financial information USD million USD million USD million Balance at the beginning 9,714 — 9,714 of the period Group’s share of profits and other gains and 240 (20) 220 losses attributable to associates Group’s share of other (6) — (6) comprehensive loss Foreign currency 1,061 — 1,061 translation Balance at the end of 11,009 (20) 10,989 the period Change in accounting policy On 10 December 2012 the main shareholders of Norilsk Nickel, UC RUSAL Plc and Interros, concluded a shareholders agreement together with Millhouse (owned by Mr. Roman Abramovich) in respect of their respective investments in Norilsk Nickel. In accordance with the shareholders agreement, UC RUSAL agreed to sell 3,873,537 shares of Norilsk Nickel to Millhouse for USD160 per share. This sale actually took place in the second quarter of 2013. As at 31 December 2012, the accounting policy of the Group was to treat investments in associates as a single unit of account. As a consequence, management did not separate the amount of shares expected to be sold to Millhouse (“the holding”), separately test this holding for impairment, represent the holding as non-current assets held-for-sale and then assess whether the holding is measured at the lower of its carrying amount and fair value less costs to sell as at 31 December 2012. Effective from 1 January 2013, amendments to the revised IAS 28 “Investments in associates and joint ventures” require an entity to reclassify an investment in an associate, or portion of an investment in an associate, as held-for-sale when it meets the criteria specified in IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”. As previously the Group’s investments in associates were treated as a single unit of account, the amendment to IAS 28 has resulted in a change in accounting policy. Management has reassessed the circumstances as at 31 December 2012 applying the amendments to the revised IAS 28 and concluded that the holding that is expected to be sold to Millhouse does meet the criteria in IFRS 5 and should be classified as non-current assets held-for-sale. The comparative information as at 31 December 2012 in this interim condensed financial information has been restated to reflect these adjustments which are detailed in the table below: 31 December 2012 Previously Adjusted reported Restatement financial information USD million USD million USD million Interest in associates 10,484 (811) 9,673 Assets reclassified as — 620 620 held for sale Accumulated losses (4,096) (191) (4,287) The reclassified portion of the investment in Norilsk Nickel of USD811 million was written down to its recoverable amount of USD620 million prior to reclassification to held-for-sale resulting in an impairment loss of USD191 million being recognised in the Group’s statement of income for the year ended 31 December 2012. Management’s assessment is that the adjusted carrying amount is lower than its fair value less cost to sell and no further adjustment is required. Segment reporting The Group has four reportable segments, as described in the annual report of the Company, which are the Group’s strategic business units: Aluminium, Alumina, Energy, Mining and Metals. These business units are managed separately and results of their operations are reviewed by the CEO on a regular basis. The core segments are Aluminium and Alumina. Quarter ended 31 March 2013 2012 Aluminium Alumina Aluminium Alumina (USD (unaudited) (unaudited) (unaudited) (unaudited) million) Segment revenue kt 1,010 1,502 1,120 1,683 USD million 2,324 515 2,552 571 Segment 230 (42) 244 (81) result Segment 333 (13) 354 (55) EBITDA^8 Segment EBITDA 14.3% (2.5%) 13.9% (9.6%) margin Total capital 72 32 91 30 expenditure For the quarters ended 31 March 2013 and 2012 respectively, segment result margins (calculated as the percentage of segment result to total segment revenue) from continuing operations were 9.9% and 9.6% for the aluminium segment, and negative 8.2% and 14.2% for the alumina segment. Key drivers for the increase in margin in the aluminium segment are disclosed in “Revenue”, “Cost of sales” and “Adjusted EBITDA and Results from operating activities” sections above. Detailed segment reporting can be found in the consolidated interim condensed financial information as at and for the three-month period ended 31 March 2013. ^8 Segment EBITDA for any period is defined as segment result adjusted for amortisation and depreciation for the segment. Capital expenditure UC RUSAL recorded total capital expenditures of USD110 million for the three months ended 31 March 2013. UC RUSAL’s capital expenditure for the first quarter of 2013 was aimed at maintaining existing production facilities. Quarter ended 31 March 2013 2012 (USD million) (unaudited) (unaudited) Growth project Taishet smelter 12 25 12 25 Maintenance Pot rebuilds costs 38 37 Re-equipment 60 64 Total capital expenditure 110 126 The BEMO project companies utilise the project financing proceeds to make necessary contributions to the ongoing construction projects and do not require contributions from the joint ventures partners at this time. The Company notes that its auditor, ZAO KPMG, has provided a qualified conclusion in its review of the unaudited consolidated interim condensed financial information of the Company for the three months ended 31 March 2013 as it was unable to obtain and review the consolidated interim financial information of Norilsk Nickel. An extract from the review report provided by ZAO KPMG on the consolidated interim condensed financial information of the Company dated 13 May 2013 is as follows: “Basis for Qualified Conclusion We were unable to obtain and review consolidated interim financial information of the Group’s equity investee, OJSC MMC Norilsk Nickel (“Norilsk Nickel”), supporting the Group’s share in the profit of that investee of USD99 million for the three -month period ended 31 March 2013, the Group’s share in other comprehensive income of that investee of a USD10 million loss for the three-month period ended 31 March 2013, and the carrying value of the Group’s investment stated at USD9,105 million at 31 March 2013. Had we been able to complete our review procedures in respect of interests in associates, matters might have come to our attention indicating that adjustments might be necessary to this consolidated interim condensed financial information. Qualified Conclusion Based on our review, except for the possible effects of the matter described in the Basis for Qualified Conclusion paragraph, nothing has come to our attention that causes us to believe that the consolidated interim condensed financial information as at 31 March 2013 and for the three-month period then ended is not prepared, in all material respects, in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. Emphasis of Matter Without further qualifying our conclusion, we draw attention to the fact that the corresponding figures presented for the three-month period ended 31 March 2012 include the effects of the adjustments described in Note 10 (a) to the consolidated interim condensed financial information. We have reviewed the adjustments described in Note 10 (a) that were applied to restate the consolidated interim condensed financial information as at and for the three-month period ended 31 March 2012. Based on our review, nothing has come to our attention that causes us to believe that such adjustments have not been properly applied. Effective 1 January 2013, the Group changed its accounting policy with respect to accounting for interests in associates. The reason for and the effects of this change are described in Note 10 (b) to the consolidated condensed interim financial information. We have audited the adjustments described in Note 10 (b) that were applied to restate the consolidated condensed interim financial information as at 31 December 2012. In our opinion, such adjustments are appropriate and have been properly applied.” Consolidated interim condensed financial information The unaudited consolidated interim condensed financial information of UC RUSAL for the three months ended 31 March 2013 was approved by the Directors of UC RUSAL on 13 May 2013, and reviewed by the Audit Committee. It has also been filed with the French Autorité des marchés financiers on the date hereof and is accessible on UC RUSAL’s website at http://www.rusal.ru/en/investors/ financial_stat.aspx. Audit Committee The Board established an audit committee (the “Audit Committee”) to assist it in providing an independent view of the effectiveness of the Company’s financial reporting process, internal control and risk management systems and to oversee the audit process. The Audit Committee consists of a majority of independent non-executive Directors. Members of the Audit Committee are as follows: three independent non-executive Directors, being Dr. Peter Nigel Kenny (Chairman), Mr. Philip Lader and Ms. Elsie Leung Oi-sie and two non-executive Directors, Mr. Dmitry Yudin and Mr. Christophe Charlier. On 13 May 2013, the Audit Committee has reviewed the financial results of the Company for the quarter ended 31 March 2013. Material events over the first quarter of 2013 and since the end of that period The following is a summary of the key events that have taken place over the first quarter of 2013 and since the end of that period. All information regarding key events that has been made public by the Company for the three months ended 31 March 2013 and since the end of that period pursuant to legislative or regulatory requirements, including announcements and press releases, is available on the Company’s website (www.rusal.com). UC RUSAL entered into a syndicated credit facility 31 January 2013 agreement of up to USD400 million with various international banks aimed at the early partial debt prepayment. UC RUSAL Board of Directors approved the decision to 4 March 2013 reduce the primary aluminium production at the Company’s smelters by 300,000 tonnes by the end of 2013. UC RUSAL announced the decision of ALSCON Board of 15 March 2013 Directors to temporarily suspend the smelting operations at the plant. UC RUSAL announced Aughinish alumina refinery’s 28 March 2013 modernisation programme, which will include the shift of steam production from heavy oil to gas as its main energy source. UC RUSAL announce the sale by the Company and Interros of shares and the American depositary receipts of Norilsk Nickel to Crispian was completed, according to 24 April 2013 the agreement, the Company entered in December 2012 with Interros, Mr. Potanin and Millhouse, aimed at settling various disputes and claims that had arisen between the Company and Interros in respect of Norilsk Nickel. UC RUSAL announced Alpart and Windalco alumina 25 April 2013 refineries’ modernisation programme, which will include the full shift of steam production from fuel oil to gas as their main energy source. Compliance Pursuant to Article L.451-1-2 IV of the French Code monétaire et financier, the Company is required to publish quarterly financial information for the first and third quarters of the financial year. The Directors confirm that the information contained in this announcement does not contain any false statements, misleading representations or material omissions, and all of them jointly and severally accept responsibility as to the truthfulness, accuracy and completeness of the content of this announcement. Forward-looking statements This announcement contains statements about future events, projections, forecasts and expectations that are forward-looking statements. Any statement in this announcement that is not a statement of historical fact is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risk and uncertainties include those discussed or identified in the prospectus for UC RUSAL. In addition, past performance of UC RUSAL cannot be relied on as a guide to future performance. UC RUSAL makes no representation on the accuracy and completeness of any of the forward-looking statements, and, except as may be required by applicable law, assumes no obligations to supplement, amend, update or revise any such statements or any opinion expressed to reflect actual results, changes in assumptions or in UC RUSAL’s expectations, or changes in factors affecting these statements. Accordingly, any reliance you place on such forward-looking statements will be at your sole risk. By Order of the board of directors of United Company RUSAL Plc Vladislav Soloviev Director 14 May 2013 As at the date of this announcement, the executive Directors are Mr. Oleg Deripaska, Ms. Vera Kurochkina, Mr. Maxim Sokov and Mr. Vladislav Soloviev, the non-executive Directors are Mr. Dmitry Afanasiev, Mr. Len Blavatnik, Mr. Ivan Glasenberg, Mr. Maksim Goldman, Ms. Gulzhan Moldazhanova, Mr. Christophe Charlier, Mr. Artem Volynets, Mr. Dmitry Yudin, Mr. Vadim Geraskin, and the independent non-executive Directors are Mr. Barry Cheung Chun-yuen, Dr. Peter Nigel Kenny, Mr. Philip Lader, Ms. Elsie Leung Oi-sie and Mr. Matthias Warnig (Chairman). All announcements and press releases published by the Company are available on its website under the links http://www.rusal.ru/en/investors/info.aspx and http://www.rusal.ru/en/press-center/ press-releases.aspx, respectively. Contact: United Company RUSAL Plc
United Company RUSAL Plc: Results Announcement for the Three Months Ended 31 March 2013
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