Lower aluminium prices dent results at Novelis

Global – Revenues slid 11% to US$ 9.9 billion in fiscal year 2016 for aluminium recycling major Novelis as higher shipments were more than offset by a 16% fall in average base aluminium prices and a 58% drop in local market premiums. The company achieved a net income of around US$ 50 million in the fourth quarter for a year-on-year increase of 35%; for the fiscal year as a whole, however, Novelis recorded a net loss of US$ 38 million.

‘We ended fiscal 2016 with strong operational performance globally, enabling us to achieve record total shipments and automotive sheet shipments for the year,’ observes president and ceo Steve Fisher. However, the results were ‘partially offset by less favourable recycling benefits due to significantly lower aluminium prices as compared to the prior year, as well as general inflation and higher fixed costs associated with new automotive and recycling operations’, the company goes on to note.

Higher shipments of beverage can and automotive sheet resulted in a 2% increase in total flat rolled aluminium product shipments to 3.1 million tonnes in fiscal year 2016. The proportion of the company’s shipment portfolio stemming from automotive sheet climbed to 15% from 11% in the previous year.

By the end of fiscal year 2016, all five of the company’s recently-constructed automotive finishing lines were producing and shipping sheet products; when all of these lines are fully utilised, automotive shipments will grow to approximately 25% of total shipments, Novelis points out.