Rusal: H1 EBITDA up 74.3%, but debt burden remains high

On August 25, Rusal released its results for the first half of 2026. Revenue fell 2.8% year-on-year to RUB 1,170.1 billion, but EBITDA rose 74.3% to RUB 95.97 billion, with EBITDA margin expanding from 7.7% to 13.8%. This review examines what drove the profitability gain, how debt changed, and what it means for shareholders.

Key takeaways

— H1 EBITDA up 74.3% despite revenue down 2.8% – margin expanded from 7.7% to 13.8%

— H1 net margin at 5.0% of revenue versus a loss a year earlier

— Debt burden at end-H1 – 6.57 times LTM EBITDA

— Net debt up RUB 146.4 billion over the last 12 months to RUB 630.3 billion

— EV/EBITDA on LTM at 10.56, half the three-year average

— No dividends paid over the last 12 months; model estimates next payout at RUB 0.0 per share

Key figures, RUB bn

H1 EBITDA up 74.3% despite revenue down 2.8% – margin expanded from 7.7% to 13.8%

In H1 2026, Rusal's revenue reached RUB 1,170.1 billion, down 2.8% year-on-year. EBITDA, however, rose 74.3% to RUB 95.97 billion. This indicates that the company managed to significantly improve operational efficiency even with lower revenue.

EBITDA margin for the half-year came in at 13.8% versus 7.7% in the same period last year. The margin expansion is the key driver of profitability growth, and it occurred despite falling revenue, pointing to cost control or favorable aluminum price dynamics.

H1 net margin at 5.0% of revenue versus a loss a year earlier

Net margin for H1 2026 stood at 5.0% – a year earlier the company posted a loss with a margin of minus 1.2%. The swing from loss to profit reflects both higher operating profit and, likely, lower financial expenses or one-off items.

However, net margin remains modest against an EBITDA margin of 13.8%, indicating substantial interest expenses and possibly other deductions. For shareholders, this means part of operating profit goes to debt servicing.

Debt burden at end-H1 – 6.57 times LTM EBITDA

At end-H1 2026, Rusal's net debt stood at RUB 630.3 billion, equivalent to 6.57 times LTM EBITDA. This is a high level of leverage that limits the company's financial flexibility.

For comparison, EV/EBITDA on LTM is 10.56, half the three-year average of 19.09. This suggests the market values the company cheaper relative to its historical valuation, but high leverage remains a key risk.

Net debt up RUB 146.4 billion over the last 12 months to RUB 630.3 billion

Over the last 12 months, net debt increased by RUB 146.4 billion, and by RUB 71.3 billion since the previous reporting date. The debt increase occurred despite positive operating cash flow of RUB 134.5 billion over the LTM, indicating significant capital expenditures or other outflows.

Operating cash flow over the last 12 months was RUB 134.5 billion, but that was insufficient to offset the debt increase. This means the company is financing part of its needs through borrowing, adding to future burden.

EV/EBITDA on LTM at 10.56, half the three-year average

The current EV/EBITDA multiple on LTM is 10.56, versus a three-year average of 19.09. This means the shares trade at a significant discount to their own history, which may attract investors seeking undervalued assets.

However, the low multiple also reflects high risks associated with leverage and dividend uncertainty. The market likely prices in these factors, so the discount may persist.

No dividends paid over the last 12 months; model estimates next payout at RUB 0.0 per share

Over the last 12 months, Rusal paid no dividends. The model estimates the next payout at RUB 0.0 per share, which corresponds to a payout ratio of 0.16 of profit, but with a zero absolute value, payouts are unlikely.

The fair yield for this name is estimated at 10.5%, but with no dividends, investors receive no current income. The dividend question remains open and will depend on the company's ability to generate free cash flow after debt service.

Valuation on the latest reported figures

Bottom line

Rusal posted strong EBITDA growth in H1 2026 – up 74.3% despite lower revenue, driving margin expansion from 7.7% to 13.8%. However, net margin remains low at 5.0%, and leverage is high at 6.57 times LTM EBITDA, with net debt rising by RUB 146.4 billion over the year. The shares trade at a discount to their own history (EV/EBITDA 10.56 vs. average 19.09), but that is justified by risks. The key question for holders is whether the company can generate sufficient cash flow to reduce debt and resume dividends.