Companies

Novelis income falls 39% to $63 million

Our Bureau Mumbai | Updated on May 08, 2020 Published on May 08, 2020

Novelis, the wholly-owned US-based subsidiary of Hindalco Industries, reported that its net income was down 39 per cent in March quarter to $63 million against $103 million logged in same period last year largely due to lower production.

The company has accounted for loss of $71 million for extinguishing debt related to the refinancing of senior notes in the quarter under review.

Net sales decreased 12 per cent to $2.7 billion ($3.08 billion) in the quarter under review, driven by lower average LME aluminium prices and local market premiums and a seven per cent decline in shipments.

The decline in flat rolled product shipments to 81,100 tonnes due to the initial impact from Covid-related disruptions in March.

Adjusted EBITDA increased seven per cent to $383 million ($357 million).

Covid impact

Novelis is experiencing increasing disruption in global aluminium production and supply chain – including the

shutdown of some of the plants – as a result of government decrees and some customers temporarily shutting down their own manufacturing operations in response to the Covid pandemic.

The extent of the pandemic impact on the company will depend on future developments which are highly uncertain and cannot be predicted, it said.

Aleris Acquisition

On April 14, Novelis closed acquisition of Aleris Corporation and has begun integrating the two companies.

The acquisition provides a number of strategic benefits, including product portfolio diversification with the entry into high-value aerospace, enhances strategic position in Asia, and allows for about $150 million in potential annual cost synergies.

Published on May 08, 2020

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