May 28, 2014
Novelis: Net Income Declines in 'Transitional Year'
Novelis, the Atlanta-based aluminum maker, reported net income of $54 million for the fourth quarter of its 2014 fiscal year, down 8.4 percent from the same period the previous year. Full-year net income of $104 million was about half the total from fiscal year 2013.
"Fiscal 2014 was a transitional year for Novelis, and we closed it on a strong note," said Phil Martens, president and CEO. "We completed the majority of our business transformation initiatives to secure our leadership position in flat-rolled products for the global automotive and beverage can markets, and enhance our unmatched, low-cost recycling capabilities worldwide. Together these actions are driving both our top and bottom lines."
Net sales for the quarter totaled $2.5 billion, up 1.9 percent from the same quarter in fiscal year 2013. Full-year net sales of $9.8 billion were flat compared to 2013, with higher shipments offset by a 10 percent decrease in average aluminum prices and lower conversion premiums.
The company reported shipments of aluminum rolled products of 753 kilotonnes in the fourth quarter, up 8 percent compared to the prior year. Every global operating region reported an increase in shipments year-over-year. Higher global shipments were the primary driver behind the 4 percent increase in adjusted EBITDA versus the prior year to $250 million. For the full year, shipments increased 4 percent to 2,895 kilotonnes.
"While 2014 provided market challenges, particularly lower can sheet pricing and volatile market premiums for primary aluminum, we have positioned the company well for the future. Auto will accelerate this year as our key supplier role to Ford's new aluminum-intensive F-150 program will demonstrate," said Martens.
The company noted a number of accomplishments over the past year, including: generation of significant cash flow to fund capital investments; significant progress on all strategic expansions, including the ramp up of rolling production at Brazil and Korea mill expansions and the start of commercial production at U.S. automotive finishing lines; incremental investment of $205 million to further expand global auto finishing capacity to 900 kilotonnes annually; and expanded recycling capabilities in all regions. The company has set a goal of 80 percent recycled content in its products by 2020.