May 31, 2019 / 2:17 PM / 3 months ago

En+'s first-quarter profit hit by lower aluminium prices

MOSCOW, May 31 (Reuters) - En+ Group, which manages the energy and aluminium assets previously controlled by tycoon Oleg Deripaska, said on Friday its first-quarter net profit fell by 39% to $409 million due to lower aluminium prices.

En+ said revenue had declined by 19% to $2.8 billion in the first quarter as a result of a 14% decrease in aluminium prices on the London Metals Exchange.

“The aluminium market continues to experience pricing pressure with only modest growth in global demand expected in 2019,” Vladimir Kiriukhin, En+’s chief executive, said in the statement.

En+ shares were down about 3.8% by 1347 GMT.

U.S. sanctions also hit the company’s sales volumes.

“In the reporting period (U.S.) sanctions throughout January adversely impacted the group’s sales’ volumes,” En+ said in a statement.

En+ and aluminium group Rusal, in which En+ owns a stake, were removed from the U.S. sanctions list by the Treasury Department’s Office of Foreign Assets Control in January after Deripaska reduced his En+ stake.

In a presentation on the results, En+ said it expected to reverse the majority of U.S. sanctions impact and to release between $600 million and $900 million of working capital. It did not provide the time frame for this goal.

En+ also said the U.S.-China trade dispute had caused a decline in aluminium prices.

Rusal had said earlier in May it expected growth in global demand for aluminium to slow to 3% in 2019 from 3.6% in the previous year.

Revenue of En+’s power business fell by 12.4% to $874 million in the first quarter due to a weaker rouble. But the business benefited from improved electricity sales volumes, higher prices and heat tariffs and delivered a 13.5-percent increase in net profit to $151 million. (Reporting by Polina Devitt. Editing by Jane Merriman)

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