Novelis Reports Full Year 2006 Financial Results

    ATLANTA, Mar. 1 /CNW/ -- Novelis Inc. (NYSE:   NVL) (TSX: NVL) today
reported its financial results for the full year ended December 31, 2006.  The
Company incurred a net loss of $275 million, or $(3.71) per share, on net
sales of $9.8 billion, compared with net income of $90 million, or $1.21 per
share, on net sales of $8.4 billion for 2005.
    In 2006, the Company reduced its total debt by $195 million.  Despite a
challenging metal price environment, Novelis has reduced its debt by $516
million since the Company's inception in January 2005.  Cash and cash
equivalents as of December 31, 2006, were $73 million.
    Total rolled products shipments increased to 2,960 kilotonnes in 2006
from 2,873 kilotonnes in 2005.  This increase was primarily due to increased
shipments to the can market in North and South America and Europe, as well as
increased shipments of hot- and cold-rolled intermediate products in Europe.
    The 2006 net loss includes almost no tax benefit largely because the
Company recorded $71 million of additional valuation allowances related
primarily to tax losses in certain jurisdictions where it does not expect to
be able to utilize those losses.  Additionally, the Company incurred added tax
expense associated with certain exchange items for which there was no pre-tax
benefit.  Cash taxes paid in 2006 were $68 million.
    As previously reported, Novelis' earnings in 2006 were adversely affected
by higher metal prices, which the Company was unable to completely pass
through to certain customers as a result of metal price ceilings on a portion
of its can sheet sales in North America.  In 2006, Novelis was unable to pass
through approximately $475 million of metal price increases associated with
sales under these contracts.  This impact was partially offset by internal and
external hedges, including $63 million of gains from the change in fair value
of derivative instruments.  Additional items adversely affecting earnings
include higher energy and transportation costs; the adverse effects of
currency exchange rates; and expenses related to the Company's restatement and
review process, delayed financial reporting and continued reliance on third-
party consultants to support its financial reporting requirements.
    Ed Blechschmidt, Acting Chief Executive Officer of Novelis, said, "In the
past year we made significant progress in strengthening the company for the
future.  We have taken steps to streamline the manufacturing operations and to
introduce supply chain improvements.  We have also improved our financial
controls and procedures and our risk management capabilities.  At the same
time, we have strengthened our focus on customer satisfaction, supported by
innovations such as the Novelis Fusion(TM) technology for multi-alloy sheet
products.  We believe that the fundamentals of the business, our operations
and our market position are strong, and that we are well positioned to build
on our accomplishments as we look forward to our acquisition by Hindalco."
    As previously announced, on February 11, 2007, Hindalco Industries
Limited and Novelis announced that they have entered into a definitive
agreement for Hindalco to acquire the outstanding shares of Novelis.  Under
the terms of the agreement, Novelis shareholders will receive $44.93 in cash
for each outstanding common share upon the closing of the sale transaction.

    Novelis is the global leader in aluminum rolled products and aluminum can
recycling.  The Company operates in 11 countries and has approximately 12,900
employees.  Novelis has the capability to provide its customers with a
regional supply of technologically sophisticated rolled aluminum products
throughout Asia, Europe, North America and South America.  Through its
advanced production capabilities, the Company supplies aluminum sheet and foil
to the automotive and transportation, beverage and food packaging,
construction and industrial, and printing markets.  Visit

    Statements made in this news release which describe Novelis' intentions,
expectations, beliefs or predictions may be forward-looking statements within
the meaning of securities laws. Forward-looking statements include statements
preceded by, followed by, or including the words "believes," "expects,"
"anticipates," "plans," "estimates," "projects," "forecasts," or similar
expressions.  Examples of such statements in this news release include, among
other matters, our expected inability to utilize tax losses and our
positioning as we look to our acquisition by Hindalco.  Novelis cautions that,
by their nature, forward-looking statements involve risk and uncertainty and
that Novelis' actual results could differ materially from those expressed or
implied in such statements.  We do not intend, and we disclaim any obligation,
to update any forward-looking statements, whether as a result of new
information, future events or otherwise.  Factors that could cause actual
results or outcomes to differ from the results expressed or implied by
forward-looking statements include, among other things: the level of our
indebtedness and our ability to generate cash; relationships with, and
financial and operating conditions of, our customers and suppliers; changes in
the prices and availability of aluminum (or premiums associated with such
prices) or other materials and raw materials we use; the effect of metal price
ceilings in certain of our sales contracts; our ability to successfully
negotiate with our customers to remove or limit metal price ceilings in our
contracts; the effectiveness of our metal hedging activities, including our
internal used beverage can and smelter hedges; fluctuations in the supply of,
and prices for, energy in the areas in which we maintain production
facilities; our ability to access financing for future capital requirements;
continuing obligations and other relationships resulting from our spin-off
from Alcan; changes in the relative values of various currencies; factors
affecting our operations, such as litigation, environmental remediation and
clean-up costs, labor relations and negotiations, breakdown of equipment and
other events; economic, regulatory and political factors within the countries
in which we operate or sell our products, including changes in duties or
tariffs; competition from other aluminum rolled products producers as well as
from substitute materials such as steel, glass, plastic and composite
materials; changes in general economic conditions; our ability to improve and
maintain effective internal control over financial reporting and disclosure
controls and procedures in the future; changes in the fair value of derivative
instruments; cyclical demand and pricing within the principal markets for our
products as well as seasonality in certain of our customers' industries;
changes in government regulations, particularly those affecting taxes,
environmental, health or safety compliance; changes in interest rates that
have the effect of increasing the amounts we pay under our principal credit
agreements and other financing arrangements; the development of the most
efficient tax structure for the Company; the risk that the pending transaction
with Hindalco may not be completed in a timely manner or at all; and the
potential adverse effect on our business and results of operations as a result
of the pending sale transaction.  The above list of factors is not exhaustive.
Other important risk factors are included under the caption "Risk Factors" in
our Annual Report on Form 10-K for the year ended December 31, 2006, as filed
with the SEC, and may be discussed in subsequent filings with the SEC.
Further, the risk factors included in our Annual Report on Form 10-K for the
year ended December 31, 2006, are specifically incorporated by reference into
this news release.

    Additional Information and Where to Find it
    In connection with the proposed arrangement and required shareholder
approval, Novelis Inc. will file a proxy statement/circular with the U.S.
Securities and Exchange Commission (the ''SEC'').  INVESTORS AND SECURITY
holders may obtain free copies of these documents (when they are available)
and other documents filed with the SEC at the SEC's web site at
In addition, the documents filed by Novelis with the SEC may be obtained free
of charge by contacting Novelis at 3399 Peachtree Road NE, Suite 1500,
Atlanta, GA 30326, Attention:
    Corporate Secretary.  Our filings with the SEC are also available on our
website at

    Participants in the Solicitation
    Novelis and its officers and directors may be deemed to be participants
in the solicitation of proxies from Novelis' shareholders with respect to the
arrangement.  Information about Novelis' officers and directors and their
ownership of Novelis' common shares is set forth in the information circular
for Novelis' 2006 Annual Meeting of Shareholders, which was filed with the SEC
on September 15, 2006.  Investors and security holders may obtain more
detailed information regarding the direct and indirect interests of Novelis
and its respective officers and directors in the acquisition by reading the
preliminary and definitive proxy statement/circulars regarding the
arrangement, which will be filed with the SEC.

For further information:

For further information: Charles Belbin, +1-404-814-4260, or, or Investors, Eric Harris, +1-404-814-4304, or, both of Novelis Inc. Web Site:

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