Atlanta’s rolled and recycled aluminium firm Novelis Inc. reported results for the second quarter of their FY 2018 yesterday, boasting record numbers in several major financial categories.
The firm reported net sales of US$2,794 million, up year-on-year from last year’s total of US$2,361 million. The rise in sales the firm credits to higher average aluminium prices and higher total shipments. Shipments of flat-rolled aluminium increased by 4 percent to a record quarterly total of 802 thousand metric tons, buoying overall sales numbers.
Income before taxes totaled US$423 million, a reversal from last year’ second-quarter loss of US$62 million. Net income came to US$307 million, also a turn around from last year, when Novelis reported a net loss of US$89 million, a reversal that the company credits to a 12-percent rise in adjusted EBITDA.
EBITDA in the quarter totaled US$576 million, up year-on-year from last year’s second-quarter EBITDA of US$107 million. Adjusted EBITDA in the quarter came to a record US$302 million, bettering last year’s second-quarter adjusted EBITDA of US$270 million. Novelis says the record high is the result of higher shipments, improved metal costs, and increased efficiencies in operations.
Steve Fisher, President and Chief Executive Officer for Novelis, said the favorable results in the quarter are largely attributable to increased demand for specialized aluminium.
“As an industry, we are seeing increasing demand for lightweight, high-strength aluminum from global automotive customers based on aluminum’s ability to provide equal or better quality, strength and safety compared to other materials. At Novelis, our strategy to grow alongside our customers who are adopting innovative aluminum solutions to meet their design, performance and sustainability needs has resulted in a strong balance sheet and the ability to raise our full year guidance. With this increased strategic flexibility we are now actively seeking organic investment opportunities to further expand our leadership position in the growing automotive aluminum sector.”
Devinder Ahuja, Senior Vice President and Chief Financial Officer for Novelis, indicated that these results are a bellwether of improved results in the coming quarters.
“Our continued strong financial performance and proceeds from the Ulsan joint venture transaction further improved our net leverage position in the quarter, and we remain on track to generate record free cash flow this fiscal year.”
As a result of the favorable financials in the quarter, Novelis raised fiscal 2018 Adjusted EBITDA guidance to a range of US$1,150 million and US$1,200 million.
Novelis is a subsidiary of Mumbai’s Hindalco Industries Ltd. Based in Atlanta, the firm accounts for almost half of Hindalco’s consolidated revenue. The world’s largest recycler of aluminium, Novelis conducts operations in ten different countries, employs around twelve thousand people, and reported US$10 billion in revenue for the most recent fiscal year.