Rusal's net debt grows 2.6% in Q3 due to $150 mln loan, drop in cash
MOSCOW. Nov 13 (Interfax) - UC Rusal took out a loan of $150 million in September, several analysts who took part in a conference call with the Russian aluminum giant on Tuesday told Interfax.
Company representatives did not specify the bank that extended the loan.
Rusal's net debt grew by $259 million or 2.6% in the third quarter to $10.142 billion.
In addition to the new loan, Rusal's debt burden grew due to a decline in cash. The company's free cash flow was negative due to growing capex and falling profits, VTB Capital's Viktor Drozdov said.
Rusal's capex increased by more than 40% in the third quarter compared to the previous reporting period, Boris Krasnozhenov of Renaissance Capital said. "If the figure stays at this level, Rusal will have to spend $640 million on capex. Considering the need to service debt, the company will have to spend over $1 billion in total on capex and interest payments," he said.
If the situation on the aluminum market does not improve, Rusal could face certain risks related to sufficient generation of cash flow to finance capex and debt servicing, Krasnozhenov said.
Rusal made assurances in the conference call that about $500 million in ruble bonds that could be tendered for buyback as early as in February 2014 will be redeemed by the company, Drozdov said.
Rusal's earnings before interest, tax, depreciation and amortization (EBITDA) were unchanged year-on-year at $130 million in the third quarter of 2013, while revenue slumped 5.1%. The company's net loss jumped nearly 46% to $172 million in the third quarter, its adjusted loss decreased by 6.5% to $232 million, and recurring net loss rose 73.7% to $132 million.