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Novelis Reports First Quarter Fiscal 2021 Results

Metal News - Published on Thu, 13 Aug 2020

Image Source: Novelis Coronavirus COVID19
Novelis Inc has reported a net loss attributed to its common shareholder of USD 79 million, and a net loss from continuing operations of USD 61 million for the first quarter of fiscal year 2021, down 162 percent and 148 percent, respectively, versus the prior year period. Excluding tax-effected special items in both years, first quarter fiscal 2021 net income was USD 22 million, down 85 percent versus the prior year period. This decline is due mainly to the after-tax impact of lower Adjusted EBITDA, as well as higher depreciation and amortization and unrealized derivative losses mainly associated with the acquisition of Aleris.

While the company's financial results were impacted by the COVID-19 pandemic, the resiliency of the beverage can market provided stability and demand trends in the automotive and specialty markets recovered significantly towards the end of the quarter. Most notably, its automotive customers across regions are trending positively toward pre-pandemic production levels. In addition to healthy automotive customer pull, the company is beginning to realize targeted operating fixed costs, general administrative expenses and R&D savings. Novelis has also maintained substantial liquidity to help navigate the current dynamic environment and manage the successful integration of Aleris. As demand trends increase in certain markets, the company continues working closely with customers to leverage its global manufacturing footprint and adjust production levels to meet their needs.

Net sales decreased 17 percent from the prior year period to USD 2.4 billion for the first quarter of fiscal 2021. This was driven by sharply lower average LME aluminum prices and local market premiums, as well as a seven percent decline in total flat rolled product shipments. Shipments of 774 kilotonnes were impacted by weak market conditions, partially offset by the addition of the acquired Aleris business.

Adjusted EBITDA decreased 32 percent to USD 253 million in the first quarter of fiscal 2021 compared to USD 372 million in the prior year period. The decrease was driven mainly by lower shipments and unfavorable product mix but partially offset by strong cost control, and EBITDA contribution from the acquired Aleris business.

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Posted By : Yogender Pancholi on Thu, 13 Aug 2020
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