Russia's Rusal boosted physical aluminium sales last year thanks to Asian markets, but low prices caused its net profit to slide 84%, the world's largest aluminium producer outside China said on Friday.

Although Rusal itself is not a target of Western sanctions, its production costs have surged after Moscow sent troops into Ukraine in February 2022. While there are no sanctions on Russian aluminium, some Western consumers are shunning new deals for metals made in Russia.

Rusal's aluminium sales rose 6.6% to 4.2-million metric tons in 2023, driven by release of excess inventory accumulated by the end of 2022, while production was largely unchanged at 3.8 million tons.

"The increase in physical sales was driven by successful redirection towards Asian markets," Rusal said.

Revenue fell 12.6% to $12.2-billion, with Europe contributing $3.4-billion and Asia $4.7-billion. The rest mostly came from sales in Russia and the former Soviet Union.

Sales to China, which has become the company's largest market after Russia, more than doubled to $2.86-billion from $1.19-billion in 2022.

Asia accounted for 38.4% of Rusal's revenue in 2023, up from 27% in 2022. China's share was 23.4%, compared with 8% a year earlier. Europe's contribution fell to 27.8% from 35.7%, but it remained a key market, Rusal said in the report.

"Geopolitical tensions, including the unprecedented regime of external restrictions and supply chain disruptions, as well as a significant drop in aluminium prices, had a negative impact on the сompany's results," Rusal said.

The higher sales were offset by an 18% decrease in the weighted-average realised aluminium price to $2,439 per ton.

Rusal's adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) slumped 61.2% to $786-million, while costs for sourcing key feedstock alumina jumped 9.9% to $2.03-billion with the loss of supplies from Ukraine and Australia.

That caused annual net profit to fall by 84.3% to $282 million.

Rusal last year bought a 30% stake in a Chinese alumina refinery and plans to build an alumina plant in Russia to reduce its reliance on imported raw materials.