Novelis Reports 3Q 2016 Net Income of US$6MM

Novelis Reports 3Q 2016 Net Income of US$6MM

Atlanta’s Novelis disclosed in a press release today the firm’s net income was US$6 million for the third quarter of fiscal year 2016. Outside of tax-effected items, the firm reported net income of US$32 million in the third quarter of fiscal 2016. The firm reported US$54 million of net income in the third quarter of fiscal 2015.

When removing the impact of metal price lag in both quarters, Novelis’s Adjusted EBITDA was US$238 million in the third quarter of fiscal 2016. This is an increase of four percent compared to US$228 million in fiscal 2015. The firm chalks up the increase to more shipments of automobile and beverage can sheet aluminium. They say this uptick is partially diminished by suboptimal aluminium prices compared to those in the same quarter of 2015. Profits are also diminished due to higher costs of automotive and recycling operations.

“Our good performance this quarter validates our strategy to grow aluminium rolled products capabilities around the world to serve high growth, high value industries including automotive and packaging,” said Novelis’s President and Chief Executive Officer Steve Fisher. “The success of our expansion projects coupled with our steady improvement in operational performance positions Novelis for continued growth and profitability.”

Novelis’s sales of rolled aluminium products grew by three percent to 779 thousand metric tons in the third quarter of fiscal 2016, up from 757 thousand metric tons sold in the third quarter of 2015.  Even though the firm shipped more aluminium, Novelis’s income dropped seventeen percent to US$2.4 billion for the quarter in question. Novelis says the decline was caused by the global drop in aluminium prices as well as lower local market premiums.

Novelis reported negative US$12 million of free cash flow in the third quarter of fiscal 2016, which is identical to the same period in 2015.  The firm’s capex was US$78 million in the third quarter of fiscal 2016, which is a decline from US$104 million reported in the previous year.  Novelis plans just under US$400 million of capex in fiscal 2016. The firm’s reported solid liquidity as of the last day of 2015 was US$946 million.