Inc.s profits surged despite lower average aluminum
prices, lower shipments and disruptions at its North American
The headwinds included the
implementation of a new enterprise resource planning system
(ERP) at two of its North American plants and a fire at its
Oswego, N.Y., aluminum complex (
amm.com, Feb. 14), but the Atlanta-based producer
still managed to swing to a profit in its fiscal fourth quarter
due to stronger demand and good cost-control measures.
Novelis posted net income of
$203 million for its fiscal year ended March 31, more than
double $90 million the previous, even as revenue slipped 11.3
percent to $9.81 billion.
Fiscal fourth-quarter net income
of $59 million was in sharp contrast to a $106-million net loss
in the same period a year earlier despite revenue slipping 4.1
percent to $2.5 billion.
But while profits jumped,
shipments of aluminum rolled products slipped 1.8 percent to
2.79 million tonnes in fiscal 2013 from 2.84 million tonnes the
previous year, mostly as a result of the sale of the
companys three foil plants in Europe (amm.com, July 2) and
production disruptions in North America, Novelis said.
Shipments of aluminum rolled products dipped to 698,000 tonnes
in the fiscal fourth quarter, down 0.7 percent from 703,000
tonnes a year earlier.
Novelis previously said it
closed its Saguenay plant in Canada and its Ouro Preto potline
"We produced solid results in a
transitional year marked by heavy investment," Novelis
president and chief executive officer Philip Martens said in a
May 14 statement released with earnings data. The strong
results also came in the face of "multiple unexpected
headwinds" in the second half of the fiscal year.
Novelis reported fiscal-year
capital investments of $775 million, which were directed
primarily at expansions of its global rolling, finishing and
The company said it made
"significant headway" on expansion projects, including
beginning the commissioning process for its rolling expansion
in Brazil as well as its recycling center in South Korea.
Capital expenditures are
expected to total between $700 million and $750 million in
fiscal 2014. "This is a heavy investment period for us that is
necessary to maintain and grow our leadership position in the
industry. Fiscal 13 was a transitional year, much like
fiscal 14 will be," Martens said.
Novelis expects "significant
growth" in its can, automotive and specialty segments, its key
end-markets, Martens said.
Novelis said it boosted the
recycled content of its products to 43 percent in fiscal 2013,
which the company said was "good progress" toward its goal of
80-percent recycled content by 2020.