NEW YORK Novelis Inc.s net income tumbled 59.2 percent in its fiscal second quarter on weaker aluminum prices on the London Metal Exchange.
The Atlanta-based producer posted net income of $49 million for the three months ended Sept. 30 vs. $120 million in the same period last year on sales that slid 15.2 percent to $2.44 billion from $2.88 billion. Novelis said the decline was due to lower LME aluminum prices, which dropped an average of 20 percent compared with a year ago.Three-month aluminum closed Tuesdays official session on the LME at $1,941 per tonne, down 17.4 percent from this years high of $2,349 in late February.
Novelis shipped 719,000 tonnes of rolled aluminum products in its fiscal second quarter, only marginally lower than 720,000 tonnes a year earlier.
The company continues to "monitor some market-related variables due to further slowing of the global economy" and said there are "competitive pressures in some regions" that could impact the second half of the fiscal year, although it maintains its bullish outlook for can and automotive applications.
"Although we see near-term pressure due to a slowdown in the global economy, we continue to believe in the strong long-term growth outlook for can, automotive and specialties and expect our expansions to deliver strong Ebitda (earnings before interest, taxes, depreciation and amortization) contributions once they are fully commissioned," Novelis chief executive officer Philip Martens said in a statement.
The company posted net income of $140 million for the six months ended Sept. 30, down 23.1 percent from $182 million a year earlier, on sales that fell 16.7 percent to $4.99 billion from $5.99 billion.