said its expects high metals prices to push it to a 2006 loss.
The Atlanta-based smelter made the comments as it belatedly filed its 2005 annual report with regulators. The company said it has received default notices from bondholders but hopes to stave off any default by becoming current on its filings.
Novelis was spun off from
last year. The company previously said it would restate results for the first two quarters of 2005 because of errors related to liability recognition and income tax accounting.
Novelis said it is working toward filing its 2006 first-quarter report in mid- September, and expects to be current with its financial reporting with the filing of its third-quarter report during the fourth quarter.
"Metal price ceilings related to some of our can sheet sales are having a significant negative impact on our performance in 2006," CEO Brian Sturgell said. "We continue to work toward removing the remaining contract price ceilings, which had been commonplace in the industry but have become outdated due to structural changes in the market. At the same time, we are focused on improving the comprehensive hedging program we put in place for 2006 to help mitigate the impact of sustained high metal prices, and we are currently addressing the performance of our internal hedges under these circumstances.
"As a result of these metal-related items, as well as the costs of our restatement and review process, we expect that 2006 will be a transitional year," Sturgell said. "While we anticipate that 2006 cash flows will continue to be strong, we expect to incur a net loss for the year. However, for 2007, we foresee continued strong cash flows and material debt reductions. We expect to give 2006 and 2007 earnings and cash flow guidance in late September 2006."
Analysts surveyed by Thomson Financial were looking for a 71-cent profit for 2006.