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United Company RUSAL Plc: Results Announcement for the Three Months Ended 31 March 2013



  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
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