Novelis Reports Solid Growth in Third Quarter Fiscal Year 2024

Novelis Reports Solid Growth in Third Quarter Fiscal Year 2024

Novelis, a leader in sustainable aluminum solutions and the world’s top company in aluminum rolling and recycling, has announced its financial outcomes for the third quarter of the fiscal year 2024. The company highlighted a significant recovery in net income and Adjusted EBITDA during this period.

For the third quarter, Novelis reported a net income of $121 million attributable to its common shareholder, marking a substantial increase from $12 million in the same period the previous year. Excluding special items, net income rose by 81% year-over-year to $174 million. Adjusted EBITDA saw a 33% increase from the prior year, reaching $454 million, while rolled product shipments remained steady at 910 kilotonnes.

The Adjusted EBITDA per tonne shipped also experienced a 33% increase to $499. Despite a 6% decline in net sales to $3.9 billion, attributed to lower average aluminum prices, the company’s strategic focus on growth and expansion in rolling and recycling capacity is paving the way for a more sustainable future.

The company’s performance benefited significantly from favorable metal recycling benefits, higher pricing, and lower operating costs compared to the previous year, which was heavily impacted by inflation and geopolitical tensions. Net cash flow from operating activities improved to $420 million in the first nine months of fiscal year 2024, up from $309 million in the same period last year, mainly due to positive changes in working capital.

However, Adjusted Free Cash Flow was an outflow of $517 million in the first nine months, reflecting increased capital expenditures aimed at strategic investments in new capacity. The company’s net leverage ratio stood at 2.7x at the end of the quarter.

Looking forward, Novelis anticipates adjusted EBITDA per tonne to stabilize at around $525 in the fiscal fourth quarter, driven by seasonal improvements in shipments and enhanced operating leverage. The company also sees potential for further margin expansion through its disciplined capital investment strategy to capture market growth.

Novelis also provided an update on its significant investment in Bay Minette, Alabama, where it is constructing a state-of-the-art, greenfield rolling and recycling plant. This facility, the first fully integrated aluminum plant built in the U.S. in nearly four decades and the largest project in Novelis’ history, is expected to initially produce 600 kilotonnes of finished goods. The project’s capital cost is now estimated at $4.1 billion, with commissioning expected in the second half of 2026. Novelis remains confident in the project’s future returns, backed by signed customer contracts and ongoing automotive contracting. icon

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