Novelis Second Quarter Fiscal 2024 Results Show Declines Amidst Economic Hurdles

Novelis Second Quarter Fiscal 2024 Results Show Declines Amidst Economic Hurdles

Quarterly Financial Overview

Novelis has released its financial results for the second quarter of the 2024 fiscal year, revealing decreases in net income and product shipments.

Financial Metrics

The company’s net income for common shareholders fell by 14% to $157 million, and Adjusted EBITDA saw a 4% decrease to $484 million compared to the same period last year. Rolled product shipments dropped by 5%, with 933 kilotonnes shipped. Adjusted EBITDA per tonne saw a nominal increase to $519.

Sales and Operational Cash Flow

Net sales were down by 14% to $4.1 billion, influenced by the downturn in aluminum prices and a 5% decline in shipment volumes. The decrease in shipments was primarily due to reduced demand in the beverage packaging sector and economic challenges affecting some specialty markets. In contrast, automotive shipments increased.

The company’s operating cash flow for the first half of the fiscal year rose to $290 million, a reflection of improved working capital, despite a lower Adjusted EBITDA.

Capital Expenditures and Liquidity

The first half of the fiscal year also saw an increase in capital expenditures related to capacity expansion, contributing to an adjusted free cash flow outflow of $300 million. Novelis reported a net leverage ratio of 2.7x and maintained a liquidity position of $2.3 billion, including cash and available credit facilities.

Management Commentary

Executives noted the quarter’s performance, citing operational factors and the impact of market conditions on demand and pricing. They highlighted the company’s efforts to manage capital and operations in response to these conditions, aiming for improved performance in the future.

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