Nov. 25, 2015

Novelis Reports Second-Quarter Loss

Novelis, Atlanta, reported a net loss of $13 million in its second quarter, the result of one-time tax charges. Excluding the charges, the aluminum rolled products company had net income of $25 million.

Through six months, Novelis has reported a loss of $73 million, a complete reversal of the $73 million in net income through the first half of 2014.

"Our focus on growing premium can, automotive and high-end specialty shipments, managing costs and reducing working capital is delivering results," said Steve Fisher, president and CEO. "We are leveraging new assets, reducing start-up costs, and building momentum in our expanded automotive and can sheet businesses. We are now commissioning our two most recently constructed automotive lines in the U.S. and Germany and solidifying our position as the global leader in aluminum flat-rolled products."

Novelis’ shipments of rolled aluminum products totaled a record 788 kilotons in the second quarter, a 3 percent increase compared to the prior-year period. Auto shipments jumped 59 percent year over year, and were up 6 percent compared to the previous quarter.

However, sharply lower average aluminum prices and local market premiums drove a 12 percent decrease in revenues to $2.5 billion for the second quarter of fiscal 2016 compared to fiscal 2015. Net sales through six months declined 7.1 percent to $5 billion.

Average local market metal premiums continued to decline in the second quarter creating a negative metal price lag of $54 million. Although the company uses derivatives contracts to minimize the price lag associated with LME base aluminum prices, it does not use derivative contracts for local market premiums, as cost-effective hedges are not available.


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Monday, October 23, 2017