Rusal 2011 Net Falls 92 Percent on Norilsk Stake Value Decline
Net income was $237 million in the year ending Dec. 31, compared with $2.87 billion in 2010, the Moscow-based world’s biggest producer of aluminum said today in a statement. That compared with the median estimate of $1.78 billion from 16 analysts compiled by Bloomberg.
“The reduction in the carrying value of the company’s investment in Norilsk Nickel, which is attributable to the sales and purchases by Norilsk Nickel of its own shares during the year, was a primary reason for the decrease in the net profit,” Rusal said.
Rusal elected Barry Cheung as chairman on March 16 to replace billionaire shareholder Victor Vekselberg, who quit amid a conflict with Chief Executive Officer Oleg Deripaska over Rusal’s stake in Norilsk. Vekselberg wanted Deripaska to approve the sale of the 25 percent stake for as much as $18 billion to pay down Rusal’s debt and reward shareholders. Deripaska has said the stake represents a long-term investment.
Rusal shares have fallen about 48 percent since the initial share sale in Hong Kong in 2010, and closed down 0.5 percent at HK$5.65 on March 16, the lowest level in almost two months, cutting its value to HK$85.8 billion ($11.1 billion).
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