Novelis back in black with Rs 16.17 crore profit

The compnay had reported a net los of Rs 59 crore in the same period a year before

Novelis Inc, part of Hindalco Industries, has reported a net profit of Rs 16.17 crore for the third quarter ended December 31, 2012. The company had reported a net loss of Rs 59.3 crore in the same period a year before.

Net sales for the company declined by 6% to Rs 12,400 crore. The company said that sales were impacted by lower conversion premiums as well as lower average aluminium prices. Adjusted earnings before interest, tax, depreciation and ammortisation (EBITDA) went down to Rs 997 crore in the given quarter versus Rs 1,148 crore, last year.

Novelis said, “his decline was primarily due to the implementation of an Enterprise Resource Planning (ERP) system which resulted in lost shipments, reduced productivity and stabilization costs, and negatively impacted the third quarter of fiscal 2013 by approximately Rs 21 crore.”

Phil Martens, Novelis President and Chief Executive Officer said, “While we were disappointed with our results in the third quarter, we are pleased with the strong execution of our strategy.  In fact, Brazil is a good example of this, with record shipments and the successful commissioning of our rolling expansion in the region."

The company said that going forward, it sees solid demand across its regions and key end-market segments. It expects operating performance to improve, with fourth quarter of fiscal 2013 EBITDA above fourth quarter of fiscal 2012.

Novelis has been expanding in its key markets across the globe and that has resulted in a negative free cash-flow of Rs 1,665 crore. Out of which, Rs 1,040 crore were on account of capital expenditures and Rs 576 crore for the bond interest payment and negative changes in working capital.

The company said that its expansion strategy is on track with the commissioning of 265 kilotonne facility in Korea and Pinda facility in Brazil.