Novelis Sets Record EBITDA In Second Quarter Of FY 2022

Novelis Sets Record EBITDA In Second Quarter Of FY 2022

Atlanta’s rolled aluminium firm Novelis reported results for the second quarter of its fiscal year 2022 this week. Strong demand and better aluminium prices buoyed numbers for the quarter to record highs.

For the second quarter Novelis reported net income from continuing operations of US$239 million, up by two-thirds on the year. Net income from operations other than special items totaled US$244 million, good for a 54-percent increase on the year. Adjusted EBITDA for the quarter was up by 22 percent at US$553 million, translating to a 16-percent increase of adjusted EBITDA per ton shipped to a record of US$571.

Novelis shipped 968 thousand metric tons in the quarter, better by 5 percent on the year. Net sales increased by 38 percent to US$4.1 billion, which was largely the result of the increase in shipments and the increase in average aluminium prices. Shipments rose as a result of an increased demand for sustainable aluminium beverage can packaging and demand for specialty aluminium products.

Novelis’s CEO Steve Fisher said in a press release that its wide array of aluminium offerings propelled the firm to record numbers in the quarter.

“Our diverse portfolio of high-recycled-content products allowed us to capture strong market demand and deliver another record quarter of EBITDA. While we navigate near-term supply chain challenges, we are actively seeking and implementing new investment opportunities to capture growing customer demand for sustainable, low-carbon aluminum solutions.”

Novelis’s Executive Vice President and Chief Financial Officer Devinder Ahuja noted the financial improvements his firm made in the quarter.

“Since announcing Novelis’ long-term capital allocation framework earlier this year, we have reduced gross debt, improved net leverage to below our targeted 2.5x level, and returned $100 million of capital to our common shareholder. At the same time, we have maintained adequate liquidity to effectively manage the business’ working capital needs, while also remaining strongly positioned to reinvest capital in new capacity and capabilities.”

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 eleven thousand people, and reported US$11.2 billion in net sales for the most recent fiscal year.