Novelis Reports 2% Rise in Q1 Sales Driven by Increased Aluminum Prices and Shipments
Novelis Inc, a subsidiary of Hindalco Industries Ltd, announced a 2% increase in net sales for the first quarter, reaching $4.2 billion. This growth was mainly attributed to higher average aluminum prices and an 8% rise in total flat-rolled product shipments, which hit 951 kilotonnes. The increase in shipments was primarily driven by normalized demand for beverage packaging sheets, which had previously been affected by inventory reduction activities.
Despite the rise in sales, net income attributable to common shareholders decreased by 3% to $151 million. This decline was due to initial charges related to flooding at the Sierre, Switzerland plant, higher restructuring costs, and unfavorable metal price lag. However, these factors were largely offset by increased adjusted EBITDA.
Excluding special items, net income attributable to Novelis’ common shareholders rose by 32% year-over-year to $204 million. Adjusted EBITDA for the first quarter of fiscal year 2025 increased by 19% to $500 million, mainly due to higher volume and favorable product pricing, despite a less favorable product mix and increased costs. Adjusted EBITDA per tonne grew by 10% year-over-year to $525.
The company reported a net cash flow from operating activities of $74 million in the first three months of fiscal year 2025, compared to an outflow of $32 million in the same period last year. This improvement was primarily due to higher adjusted EBITDA and favorable changes in working capital. Adjusted free cash flow saw an outflow of $280 million, improving from an outflow of $349 million in the previous year, thanks to better cash flow from operating activities.
Novelis invested $348 million in capital expenditures during the first three months of fiscal year 2025, focusing on strategic investments in new rolling and recycling capacity. As of June 30, 2024, the company had a net leverage ratio of 2.4x (net debt/trailing twelve months adjusted EBITDA).
The company maintained a strong liquidity position of $2.2 billion, consisting of $886 million in cash and cash equivalents, and $1.3 billion in available credit facilities, as of June 30, 2024.
Steve Fisher, President and CEO of Novelis Inc, stated, "Novelis delivered meaningful year-over-year improvement across a number of financial metrics in the quarter, led by a double-digit increase in beverage packaging shipments benefiting from normalized demand, our broad global presence, and solid customer relationships."
