Atlanta, USA — Novelis, the world leader in aluminum rolling and recycling, has reported net income attributable to its common shareholder of $13 million for the third quarter of fiscal 2014. Excluding certain tax-effected items, net income was $23 million for the quarter, up $14 million compared to $9 million reported in the same period a year ago. Adjusted EBITDA for the third quarter of fiscal 2014 was $203 million, up 10 percent compared to $185 million reported for the same period in the prior year.
The increase was driven primarily by higher global shipments partially offset by continued pricing pressures in North America and Asia and reduced scrap benefits from lower aluminum prices.
„Our execution in the third quarter was excellent,“ said Phil Martens, President and Chief Executive Officer for Novelis, „with year-over-year shipment growth in every operating region. We have made great progress in the commissioning of our major expansions and we are now seeing the benefits of some of these projects in our results. While external market pressures partially offset the bottom line impact of this volume growth, we are confident about the realizable potential for this business as the new projects come on-line.“
Strong demand for aluminum flat rolled products
Shipments of aluminum rolled products totaled 721 kilotonnes for the third quarter of fiscal 2014, an increase of 11 percent compared to 647 kilotonnes for the same period last year. Despite being a seasonally low production quarter, shipments were up one percent sequentially compared to the second quarter. Net sales for the third quarter of fiscal 2014 were $2.4 billion, up four percent compared to the prior year resulting from higher shipments partially offset by a 12 percent decrease in average aluminum prices and lower conversion premiums.
The Company continues to see strong demand for aluminum flat rolled products globally, particularly in the automotive segment. In December, the Company announced a $205 million investment to further expand its global automotive aluminum capacity to 900,000 tons annually.
Significantly higher free cash flow results
„We are the world’s leading supplier of aluminum automotive sheet, pioneering advancements in cutting edge technologies and facilities to meet our customers‘ needs,“ balanced Martens. „Ford’s introduction last month of the aluminum intensive F-150 pickup truck will truly be a game changer for both the automotive and aluminum industries and Novelis is in an excellent position to capture the significant growth ahead.“
For the third quarter of fiscal 2014, Novelis reported liquidity of $806 million. Free cash flow was negative $61 million for the third quarter of fiscal 2014, in part due to $107 million in semi-annual bond interest payments and $157 million in capital expenditures. „We have successfully implemented several strategic actions to improve cash flow particularly around working capital activities, resulting in significantly higher free cash flow results than last year,“ said Steve Fisher, Chief Financial Officer for Novelis.