Excluding tax-effected special items in both periods, net income for the first quarter of 2013 remained $91 million, compared to $76 million for the same period in 2012, representing a 20 percent increase year-over-year.
Adjusted EBITDA was $259 million for the first quarter of 2013, compared to $306 million reported for the same quarter in 2012. The shortfall for 2013 is primarily a result of decreased volumes and lower scrap benefits year-over-year, claims Novelis. Compared to the fourth quarter of 2012, adjusted EBITDA increased 11% sequentially, driven primarily by strengthening global demand in the company’s key market sectors.
Phil Martens, president and chief executive officer of Novelis, said: “As expected, EBITDA increased sequentially as we saw market demand firm in most of our regions but decreased on a year-over-year basis, primarily due to the loss of some can business in North America, a meaningful decrease in scrap benefits as well as some production and supply chain disruptions we faced early in the quarter. Despite this, we’ve successfully offset the lost volumes going forward and resolved these production issues. In fact, we ended the first quarter very strong with June operating at levels not seen in nearly a year.”
According to Maartens, Novelis moved ahead with its key strategy of closing non-core and underperforming assets both Europe and Canada, but remained focused on its various expansions globally. “We continue to see strong global demand in our premium product segments and the addition of nearly 900kt of capacity over the next several years will allow us to capture this significant growth going forward.”
Shipments of aluminum rolled products totaled 722kt for the first quarter of fiscal 2013 compared to 767kt for the same period last year and net sales for the first quarter of fiscal 2013 were $2.6 billion, an 18% decrease compared to the $3.1 billion in the same period last year. The decrease was mainly the result of a decrease in volumes and a $626 per tonne decline in average aluminum prices when compared to the previous year, which was partially offset by favourable conversion premiums.
Novelis continues to see solid demand going forward in all of its operating regions. In addition, it expects free cash flow to remain negative in the second and third quarters as capital expenditures on strategic investments peak.