En+ Group announces 2011 results

En+ Group Announces 2011 Results

Revenue growth by 12% to $15.3 bn
Increased Output Across All Major Product Types
Broader resource base in Eastern Siberia
Setup of logistics business
Stronger positions on key Asian markets
First steps towards becoming a public company

Moscow, 7 June 2012 - En+ Group, a Russian diversified industrial leader, announces its 2011 financial and operational results.

The En+ Group's consolidated revenue grew 12% to $15.3 bn in 2011 compared to 2010 thanks to higher non-ferrous metals output and increased mining activities, as well as a better situation in the key sales markets.

Operational and financial performance

UC RUSAL (En+ Group is the controlling shareholder in UC RUSAL) increased its aluminium output by 1% to 4.12 mt in 2011; alumina output grew 4% to 8.14 mt; bauxite output grew 14% to 13.47 mt. The company's revenue rose 12% to $12.3 bn.

En+ Downstream (fully owned by En+ Group; the downstream business unites Krasnoyarsk Metallurgical Plant and Dmitrov Can Tape Test Plant) reduced its output by 8% to 131,000 t. The company's revenue rose 19% to $500 mln.

The output of the En+ Group's coal business (Vostsibugol, Tuva Mining Company, Erchim-Tkhan) rose by 8% to 16.6 mt. The aggregate revenue was $526 mln, a 25% rise compared to 2010.

SMR (fully owned by En+ Group) grew its ferromolybdenum output by 6.6% to 6.9 kt; copper concentrate output went up 7.4% to 14,290 t. The company's revenue grew 9% to $195.1 mln.

EuroSibEnergo (fully owned by En+ Group) produced 80.4 bn kWh of electricity, a 7% drop compared to 2010. The company's revenue grew 17% to $3.37 bn in 2011 compared to 2010.

The revenues of En+ Logistics, set up in 2011, amounted to $20.55 mln.

Investments into key projects

En+ Group made further progress with its key Eastern Siberian investment projects in 2011. UC RUSAL, jointly with RusHydro, continued construction of the 3 GW Boguchany HPP, and also resumed construction of the Boguchany and Taishet aluminium smelters with the aggregate capacity of 1.3 mtpa of aluminium.

En+ Group completed a feasibility study for an up-to 500 kt rolling mill to be built at the Krasnoyarsk Metallurgical Plant; equipment suppliers have been selected. The Group also launched the preparation of a scoping study for the Chinea polymetal deposit and construction of a beneficiation plant for the project.

EuroSibEnergo with its Chinese partner China Yangtze Power Co started several feasibility studies into construction of three power plants in Eastern Siberia, with total capacity of about 3 GW. En+ and WWF are now making an assessment of environmental and economic impact of the proposed HPPs on the Amur River ecosystem.

En+ Group made active resource base investments in 2011. SMR acquired a license for the development of the Agaskyr copper and molybdenum deposit (the reserves amount to over 50,000 tons of molybdenum and 100,000 tons of copper; there are substantial reserves of rhenium and silver, as well). The deposit, located in Khakassia, is in close proximity to the Sorsk mining and processing plant owned by SMR.

Tuva Mining Company acquired a license for the development of new areas (over 230 mln tons of coking coal) within the Kaa-Khem coal deposit in the Republic of Tyva. The company's aggregate coal reserves now exceed 300 mt (the En+ Group's aggregate coal reserves including Bogatyr-Komir, a 50/50 JV of RUSAL and Samruk-Energo in Kazakhstan, are now 4 bn tons). En+ started preparation of a feasibility study for the construction of a mine and a washing plant on the Kaa-Khem deposit.

In 2011, En+ Group set up a logistics business now managed by En+ Logistics to provide comprehensive logistics services to the Group's businesses. Aggregately, En+ Group companies generate about 64 mtpa of cargoes, of which 8mtpa account for exports and imports. En+ Logistics acquired 28.1% in Vanino Seaport from Basic Element, and also OVE, the owner of a rail line in the Republic of Khakassia.

Reinforcement of cooperation with Asian countries

En+ Group was actively developing cooperation with its Asian partners through 2011. Asia continues to offer promising sales opportunities for En+ Group's products.

UC RUSAL acquired 33% in Shenzhen North Investments (a NORINCO subsidiary) that sells aluminum, alloys and other non-ferrous metals in China.

EuroSibEnergo set up a JV with the China's largest hydropower company China Yangtze Power Co. The JV will build new power plants in Eastern Siberia to meet the Russia's domestic demand and export to China.

En+ Group signed a $5 bn agreement with China EXIM Bank to finance its energy, metals and mining projects.

The Group also negotiated with potential partners in China, Japan and South Korea to set up JVs for coal, iron ore mining, metal production and logistics business development in the Russia's East.

First steps towards becoming a public company

In 2011, En+ Group made its first step towards becoming a public company - VTB Capital purchased 4.35% in En+ Group from Basic Element for $500 mln (the Basic Element's stake reduced to 20%).

En+ Group CEO Artem Volynets commented: "The core idea of 2011 was active growth of relations between Russia and Asian nations, the new global economic activity center. En+ Group was very proactive strengthening cooperation with its partners and building new alliances in order to implement projects in the Russia's Eastern regions and give a strong impetus to economic development. En+ Group's investment portfolio focused on fast-growing Asian markets will help the company and its shareholders capitalize on the growing demand of Asian nations' for key resources and products - and attract investments into Russia-based projects".