Atlanta’s rolled and recycled aluminium firm Novelis Inc. released results for the third quarter of fiscal year 2018 on Thursday. The firm set several financial records in the quarter, thanks in no small part to increased shipments and improved product offerings.
The firm posted net sales in the quarter of US$3.085 billion, up 33 percent year on year from last year’s quarterly net sales of US$2.313 billion. Net income attributable to common shareholder totaled US$121 million, a jump from last year’s third-quarter total of US$63 million.
Novelis credits the rise in net sales to higher aluminium prices, higher overall shipments, and the company’s transition to higher-conversion premium products. Most notably, shipments of flat-rolled products grew by 6 percent to 796 thousand tons in the quarter, while automotive sheet grew by 12 percent in the fourth quarter, the latter due largely to ramp ups in response to growing customer demand.
Novelis says the marked increase in net income came as a result of a jump in adjusted EBITDA. EBITDA for the quarter came to US$273 million, up slightly year-on-year from last year’s third-quarter total of US$264 million. Adjusted EBITDA totaled a record US$305 million, up 20 percent from last year’s third-quarter number of US$255 million, with adjusted EBITDA per ton totaling US$303. The firm says a boost in automotive shipments, a shift to offering a more favorable product mix, and increased operational efficiencies helped it reach the record high.
Steve Fisher, President and CEO of Novelis, says the firm is planning to continue to orient itself with the ever-changing and growing aluminium demand from its customers.
“Aluminum is increasingly the material of choice for our customers. Following another quarter of record-setting financial results, we are making strategic investments to grow with our customers and advance the continued penetration of aluminum sheet in the broad automotive market of competing materials. These investments, coupled with the most advanced manufacturing processes and largest footprint in the industry, solidify our global leadership position and strengthen our diverse portfolio of lightweight, high-strength aluminum solutions.”
Devinder Ahuja, Senior Vice President and Chief Financial Officer for Novelis, indicates that this quarter’s strong numbers portend even better financial news in the coming months.
“Record Adjusted EBITDA for the second consecutive quarter has put us on track to achieve record free cash flow this fiscal year, and is providing the financial flexibility to reduce net debt and seek strategic investments, particularly in the growing automotive segment.”
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$10 billion in revenue for the most recent fiscal year.