Novelis reported numbers for the second-quarter of fiscal year 2017 earlier today. The firm reported increases in both financial and production numbers for the quarter.
The firm turned in a net loss of US$89 million for the just-ended quarter, down from a net loss of US$13 million in the previous year’s second quarter. Novelis factored in a US$112 million loss on extinguishment of debt related to the refinancing of $2.5 billion of Senior Notes in the course of the quarter, and US$27 million loss acquired in the sale of its interest in the Aluminum Company of Malaysia. When these items are excluded from the numbers, net income for the quarter was US$60 million, a year-on-year increase from last year’s total of US$25 million.
“We continued driving the positive momentum achieved over the last several quarters into the second quarter,” said Novelis’ President and Chief Executive Officer Steve Fisher. “Our recurring strong EBITDA performance is a result of strategic investments in new capacity, driving positive portfolio mix and efficiency gains through metal input optimization. We are confident this strategy, coupled with plant productivity and asset efficiency, will continue to drive enhanced operational performance and a stronger product portfolio.”
Adjusted EBITDA was up year-on-year to US$256 million, better than last year’s total of US$182 million. Adjusting for metal price lag, adjusted EBITDA was US$270 million, good for a fourteen-percent increase. Novelis accounts gains in productivity, an improved metal mix, and better foreign exchange rates for the improvement.
Net sales were US$2.4 billion in the quarter, off by five percent year-on-year. Lower aluminium prices and a two-percent drop in total shipments accounted for the difference.
“As a result of our successful bond refinancing, we will generate $55 million in interest savings annually going forward,” said Novelis’ Senior Vice President and Chief Financial Officer Devinder Ahuja. “We now expect to generate free cash flow in the range of $300 million to $350 million for the full fiscal year 2017.”
Novelis is a subsidiary of Mumbai’s Hindalco Industries Ltd., which is itself part of Indian multinational conglomerate Aditya Birla Group. 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.