Novelis Inc, the Canadian subsidiary of the country’s largest aluminium producer, Hindalco Industries, said its first-quarter net profit fell to $50 million, from $143 million in the year-ago period, due to mismatch in realisation of derivatives.
However, Ebitda (earnings before interest, tax, depreciation and amortisation) rose 112 per cent to $263 million. This was the highest quarterly adjusted Ebitda in the company’s history. “These record operating results were primarily due to strong global market demand, as well as effective cost management and efficiency gains,” said the company statement.
“Over last year, we have built a solid foundation and become a stronger, leaner and more nimble company,” said Phil Martens, president and chief operating officer, Novelis, in the statement.
Shipments of aluminum-rolled products totalled 746 kilo tonnes for the quarter, an increase of 15 per cent over 650 kilo tonnes in the same quarter last year.
The company attributed the growth to stronger end-market conditions. Net sales advanced 29 per cent to $2.5 billion, compared to $2.0 billion in the same period last year, on the back of higher aluminum prices and conversion premiums.
Liquidity for the company improved to approximately $1.1 billion at the end of the first quarter of 2011, an increase of 136 per cent from $446 million in the same period last year.
“As of June 30, our liquidity remained strong,” said Steve Fisher, chief financial officer for Novelis.
Going forward, the Company expects continued strength across all of its regions. “The results in the first quarter reflect a rapid increase in demand throughout the quarter. As a result, we are running at capacity in all of our regions,” said Martens. “In addition to our strategic initiatives and expansion plans in South America, we will focus on de-bottlenecking our facilities globally.”
