Novelis Inc, part of Hindalco Industries, has trimmed its earnings forecast for fiscal 2012 to $1.05-1.08 billion as against the earlier prediction of $1.10-1.15 billion.
Its losses for the third quarter came down to $12 million as against $43 million, last year.
The core earnings of the company stood at $213 million, down $25 million as against the same quarter last year.
Net sales decreased by 4%, at $2.5 billion because of the lower shipments and a decrease in average aluminum prices compared to the same period last year.
Shipments of its rolled products also went down by 67 kilotonne, to 648 kilotonne in the third quarter.
The company said, "This decrease in shipments was primarily a result of customer destocking in Europe due to economic uncertainty and continued weakness in the company's electronics business in Asia."
The company blamed the soft demand in Europe and Asia, coupled with its inability to absorb fixed costs and higher net interest expense as a result of our debt refinancing last year.
"These are good results, particularly when you consider the market pressures we saw in most of our regions and the fact that this is ur seasonally low quarter," said Phil Martens, Novelis President and Chief Executive Officer.
Novelis said that the company had liquidity to the tune of $857 million and free cash flow of $63 million at the end of the given third quarter.
"The decrease in liquidity compared to the previous quarter primarily relates to short-term borrowings used to purchase the 31.2% minority interest in the Company's Korean operations," it explained.
Despite lowering its earnings forecast, Novelis reaffirmed its fiscal 2012 free cash flow before capital expenditures target of $600-700 million and capital expenditures of approximately $550-600 million primarily focused on its global expansion projects in Brazil, Korea and North America.
