Novelis Inc., the world’s largest producer of rolled aluminium products, reported a quarterly profit on Tuesday after a year-earlier loss, but said production disruptions from a new software system held back results.
The company, a unit of India’s HindalCo Industries Ltd, said the transition to a new enterprise resource planning (ERP) system in North America led to lost shipments and lower productivity in the fiscal third quarter to 31 December.
Net sales fell 5.7% to $2.32 billion. Shipments were little changed at 647,000 tonnes, compared with 648,000 tonnes a year earlier, in part because of the teething pains, which the Atlanta-based company’s chief executive said had been worse than expected.
“These implementation issues are largely behind us and production has returned to near normal levels,” Chief executive Phil Martens said in a release.
Net income attributable to its common shareholders for the fiscal third quarter came in at $3 million, compared with a loss of $12 million a year earlier.
The company said results were also held back in part by “unfavourable pricing dynamics” in some regions, and higher input costs in North America.
Novelis expects its operating performance to improve, and said it expects fourth-quarter earnings before interest, taxes, depreciation and amortization to be higher than in the fourth quarter a year earlier.