Novelis Inc, a subsidiary of India’s Hindalco Industries has reported a net profit of Rs 269.5 crore as against Rs 660 crore in the second quarter of last year mainly driven by lower adjusted EBITDA and a tax benefit in the prior year that did not reoccur.
The aluminium rolled products shipments ended flat at 719 kilotonne for the quarter ended September 30, 2012 However, net sales dropped by 15% to Rs 13,200 crore. The company said, “This decrease was mainly the result of a 20 percent decline in average aluminum prices when compared to the previous year.”
The adjusted EBITDA stood at Rs 1523.5 crore as against Rs 1655.5 crore last year. The company said that the adjusted EBITDA was lower because of higher employment and project start-up costs associated with its expansions. Sequentially, the adjusted EBITDA was up by 7%, Phil Martens, president and CEO, Novelis, said.
Martens further said, “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 contributions once they are fully commissioned.”
Novelis reported a total liquidity of Rs 5,054 crore for the second quarter, however, the free cash flow was a negative Rs 137.5 crore due to its capital expenditures.
The company said, “The Company is monitoring some market related variables due to further slowing of the global economy and increased competitive pressures in some of its regions. While too early to be certain, these factors could impact the second half of the fiscal year.”