Russia's Rusal on Friday reported a near three-fold jump in its annual earnings, reflecting lower production costs and higher prices for aluminium.

Hong Kong-listed Rusal, the world's largest aluminium producer outside China, is under pressure from the widespread consequences of Western sanctions against Russia over its actions in Ukraine.

Rusal's shares, trading near their highest since before Russia sent its army into Ukraine in February 2022, jumped more than 5% before paring gains. Rusal's shares have been on a sharply upward trend since mid February.

While there are no direct sanctions on Rusal, some Western consumers are shunning new deals with Russian-made metal. In April 2024, the London Metal Exchange banned deliveries of newly-produced Russian aluminium, copper and nickel to LME-registered warehouses to comply with US and UK sanctions.

Rusal reported net profit of $803 million for the year ended December 31, 184.8% higher than the year-ago period. Rusal's revenue fell by 1.1% to $12.08 billion while production costs dropped 6.8% to $2 025 per metric ton.

Rusal flagged that the transition towards greener forms of energy accelerated last year and noted that consumption of aluminium in the transportation industry remained the largest in 2024

"The EV market is expanding due to stricter emissions regulations, government incentives, and advancements in battery technology," Rusal said in a filing to the Hong Kong exchange.

The company — one of the few Russian firms left on any of the world's exchanges — noted that the development of charging infrastructure and an increase in consumer demand for sustainable transportation are fuelling expansion in the EV market.

Total sales of aluminium decreased by 7.1% to 3.86-million metric tons in 2024 and production rose by 3.7% to 3.99-million tons.

Rusal warned that ongoing geopolitical uncertainty, including sanctions imposed by the United States, European Union and other countries, may result in "significant limitations" for sales channels, the availability of raw materials for production and its supply chain.

Since 2022, Rusal has been seeking to diversify sales towards Asian markets, but Europe still accounts for more than one fifth of revenue.

In February the EU included an aluminium ban in its 16th sanctions package against Russia but introduced a quota for aluminium imports from Russia of 275,000 tons for a 12-month period to ease the transition.