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Rusal announces first dividend since 2010
Rusal has announced its first dividends since its 2010 IPO, highlighting how the weak rouble is helping Russian metals producers ride out the tumble in commodity prices.
The company said in a statement to the Hong Kong Stock Exchange on Tuesday that it had decided to pay an interim dividend of $0.016 per share, writes the FT's Jack Farchy. The maiden dividend marks the end of a painful period of retrenching for the company, controlled by Oleg Deripaska, which has cut its net debt from $13bn in 2009 to $8bn at the end of June.
The move highlights how the sharp fall in the rouble has cushioned Russian metals producers: in spite of weak aluminium prices, which have fallen to their lowest in six years, Rusal reported a threefold increase in adjusted ebitda in the first six months of the year to $1.3bn.
However, Wiktor Bielski, mining analyst at VTB Capital, said he did not think the return to dividends would be sustainable for Rusal given the fall in global aluminium prices. The company is constrained by covenants with its lenders, which force it to use excess cash to pay down debt whenever leverage is above a defined level.
"We do not expect the next dividend payment until 2017, as we project leverage to increase in 2016," said Mr Bielski.
Source: Financial Times