Novelis reports first quarter of fiscal 2019 results

07 August, 2018

Disciplined strategy and excellent operating performance drive strong results

07 August 2018

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First quarter fiscal year 2019 highlights

  • Net income attributable to common shareholder of $137 million; excluding special items, net income increased 10 per cent YoY
  • Adjusted EBITDA increased 15 per cent YoY to $332 million
  • Net sales increased 16 per cent YoY to $3.1 billion
  • Shipments increased 2 per cent YoY to 797 kilotonnes
  • Free cash flow improved $73 million YoY

Novelis Inc., the world leader in aluminum rolling and recycling, today reported net income attributable to its common shareholder of $137 million for the first quarter of fiscal year 2019, compared to $101 million in the first quarter of fiscal 2018. Excluding tax-affected special items, the company reported net income of $113 million in the first quarter of fiscal 2019, up from $103 million in the prior period.

The increase in net income, excluding special items, is mainly due to a 15 per cent increase in adjusted EBITDA over the prior year to $332 million in the first quarter of fiscal 2019. This increase is attributed to the continued optimisation of the investments the company has made to increase global rolling, automotive finishing, and recycling capacity to drive higher shipments, strengthen its product portfolio, and manage costs. Adjusted EBITDA per ton reached $417 in the quarter, as compared to $368 in the prior year period.

Net sales increased 16 per cent over the prior year to $3.1 billion for the first quarter of fiscal 2019, driven by higher average aluminum prices, higher shipments, and more favourable product mix, partially offset by lower conversion premiums on some products. Shipments of flat rolled products increased two per cent to 797 kilotonnes.

“Outstanding operational performance with increased asset optimisation and favourable market conditions contributed to another strong quarter,” said Steve Fisher, President and CEO of Novelis. “Our recent investment announcements in North America and Asia, along with the pending acquisition of Aleris, will diversify our product portfolio and increase our participation in high-demand, high-value markets to meet growing customer demand.”

The company reported negative $4 million of free cash flow for the first quarter of fiscal 2019, a $73 million improvement over the prior year. This increase is primarily a result of higher adjusted EBITDA, lower cash interest due to the timing of payments in the prior year, and favourable metal price lag. These favourable items were partially offset by higher taxes and an increase in capital expenditures to $54 million in fiscal 2019, as compared to $39 million in the prior year period.

"The progress Novelis has made to improve and transform the business is clearly reflected in our improved financial results, enabling us to make both organic and inorganic strategic growth investments,” said Mr. Devinder Ahuja, Senior Vice President and Chief Financial Officer for Novelis.

As of 30 June 2018, the company reported a strong liquidity position of $1.9 billion. In July, Standard &; Poors rating agency upgraded the Novelis Corporate Family rating from B+ to BB-, and its senior unsecured rating from B to B+.

About Novelis
Novelis Inc. is the global leader in aluminum rolled products and the world''s largest recycler of aluminum. The company operates in ten countries, has approximately 11,000 employees and reported $11.4 billion in revenue for its 2018 fiscal year. Novelis supplies premium aluminum sheet and foil products to transportation, packaging, construction, industrial and consumer electronics markets throughout North America, Europe, Asia and South America. Novelis is a subsidiary of Hindalco Industries Limited, an industry leader in aluminum and copper, and metals flagship company of the Aditya Birla Group, a multinational conglomerate based in Mumbai, India.

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