CHICAGO Noranda Aluminum Holding Corp.s earnings plummeted in the first quarter amid lower aluminum prices on the London Metal Exchange, higher energy costs and lower sales
However, the Franklin, Tenn.-based aluminum producer remains optimistic about the rest of 2013 despite grappling with liquidity issues, the company said April 24 in commentary released with earnings data.
We are evaluating and taking appropriate actions to manage our liquidity position and provide for prudent investment in long-term growth, Noranda president and chief executive officer Layle K. (Kip) Smith said in a statement.
Noranda continues to hold a positive outlook thanks to its debt maturity profile, reliable operations, an outlook for stable demand and the prospects for further modest improvement in the U.S. economy, Smith said. We are encouraged by our opportunities for 2013, and our capability to pursue them, despite the recent decline in LME prices, he said.
Noranda reported first-quarter net income of $600,000 for the three months ended March 31, a 96.3-percent drop from year-earlier net income of $16.2 million, on sales that slipped 4.3 percent to $338.4 million from $353.5 million.
The company said it had $16.1 million in cash and cash equivalents and available borrowing capacity of $142.7 million as of March 31, 2013.
Profits were hurt by higher electricity costs in the companys primary aluminum segment, largely due to a 6.6-percent rate increase that became effective in February, and higher natural gas prices.
Meanwhile, higher value-added premiums in the primary aluminum and flat-rolled segments were offset by lower average realized Midwest transaction prices in the primary aluminum segment, the company said.
Lower production volumes in the alumina segment also impacted results, Noranda said. The company noted that the segments sales fell as more of the companys alumina production was used by its primary aluminum segment to restock supplies following output issues in the alumina segment during the third and fourth quarters of 2012.