sheet producer Novelis Inc.s net income plunged in the
three months ended June 30 due to low aluminum prices and
disappointing demand for can sheet.
continued pricing headwinds and softer-than-expected demand for
beverage can sheet partially driven by unfavorable weather
conditions," the Atlanta-based company said.
Novelis posted net
income of $14 million for its fiscal first quarter, down 84.6
percent from $91 million in the same period last year, on sales
that fell 5.6 percent to just under $2.41 billion as shipments
of rolled products slid 2 percent to 708,000 tonnes.
challenges we faced in the first quarter, we maintained
financial discipline through good cost control and will
continue this focus on cost containment going forward," Novelis
president and chief executive officer Philip Martens said in a
The company expects a
"transitional year" ahead, when several major projects will be
commissioned, including a $340-million expansion in
Pindamonhangaba, Brazil; an aluminum recycling center in
Nachterstedt, Germany; and new hot- and cold-rolling mills in
South Korea, which it began commissioning in July. Novelis also
began commissioning its two new automotive finishing lines in
the United States last month, which add 240,000 tonnes of
automotive sheet capacity.
"As expected, we had
negative cash flow in our (fiscal) first quarter primarily as a
result of continued investment in our strategic expansions and
$107 million in semi-annual bond interest payments," chief
financial officer Steve Fisher said in a statement. "Weve
made good progress reducing inventory levels at the end of the
quarter and are continuing to drive working capital
efficiencies and take other actions to improve free cash flow
A version of this article was first published by AMM sister
publication Metal Bulletin.