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En+ Q4'17 profit plummets to US$505M due to high base effect

Russian aluminum and power company En+ Group PLC reported net profit of US$505 million in the fourth quarter of 2017, down 36.9% on a yearly basis due to a high base effect in the same period of 2016.

In a March 15 release, the company said adjusted EBITDA for the quarter grew to US$907 million, from US$689 million a year earlier, despite significant inflationary pressure on the cost of production. Revenue saw an uptick of 31.3% to US$3.38 billion, and net debt for the end of 2017 stood at US$12.16 billion, down from US$13.94 billion the previous year.

Following the results, the company will pay US$394 million in dividends for 2017.

En+ said China's environmental push to cut polluting aluminum production at the end of 2017 improved supply sentiment and had a positive impact on the company's revenue for the full year. Primary aluminum and alloys sales grew to US$8.32 billion from US$6.61 billion, and revenue grew 23.7% to US$12.09 billion.

The company said 2017 was marked by strong aluminum demand growth across all geographies, registering a 6% increase in demand for primary aluminum. This drove up the average realized price of aluminum to US$1,968/t.

Full-year adjusted EBITDA climbed 39.5% to US$3.22 billion, while net profit saw a modest increase of 3.1% to US$1.40 billion.

Expansion of the company's metals segment led to an increase in CapEx spending for 2017 to US$990 million.

In terms of outlook, En+ expects primary aluminum demand to grow at a compound annual rate of between 4% and 5% until 2021 and expects the market to stay in deficit from 2018 to 2021. The company maintains a production guidance of 3.8 million tonnes of aluminum for 2018, rising to up to 4.4 million tonnes in 2021.