Novelis benefits from increased shipments
Novelis benefits from increased shipments
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Atlanta-based aluminum rolling and recycling company Novelis Inc. saw its net income increase to $303 million in the first quarter of its 2022 fiscal year compared with a net loss of $61 million in the comparable quarter of the prior year, which was negatively affected by the COVID-19 pandemic and acquisition-related special items. Excluding special items in both years, first-quarter fiscal 2022 net income from continuing operations of $260 million is up significantly compared with $22 million in the prior year, driven mainly by higher after-tax adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). Net income attributable to the company’s common shareholder was $240 million for the quarter ended June 30 compared with a net loss of $79 million in the prior-year period.
Novelis’ net sales increased 59 percent to $3.9 billion in the recently completed quarter compared with $2.4 billion in the prior-year period, primarily driven by a 26 percent increase in shipments, favorable product mix and higher average aluminum prices. Total flat-rolled product shipments increased to 973,000 metric tons compared to 774,000 metric tons in the prior-year period. The company says the increase primarily was a result of strong demand across end markets, particularly in beverage packaging and specialty products. Automotive shipments for the quarter were more than double those of the prior year, despite some headwinds from the current semiconductor chip shortage affecting the automotive industry, Novelis says.
Adjusted EBITDA increased 119 percent to $555 million in the first quarter of fiscal 2022 compared with $253 million in the prior-year period. The increase in adjusted EBITDA is primarily from higher volume and favorable product mix, as well as from metal benefits and a $47 million gain related to a favorable decision in a Brazilian tax litigation, partially offset by higher costs resulting from higher production volume and inflationary cost pressures, according to the company. Novelis says it achieved an adjusted EBITDA per ton shipped of $570 in the first quarter of fiscal 2022 compared with $327 in the prior year and $514 in the fourth quarter of fiscal 2021. Excluding the nonrecurring tax litigation benefit, adjusted EBITDA per ton equates to $522 in the first quarter of fiscal 2022.
"Our strategy to grow a diverse portfolio of sustainable aluminum products utilizing our leading geographic footprint to meet strong demand has again delivered outstanding results in the quarter," Steve Fisher, president and CEO of Novelis, says. "With new automotive capacity in the U.S. and China now ramping up and the financial fortitude to continue to invest in growth opportunities aligned with our long-term carbon neutrality goals, we will further expand our leading position in delivering low-carbon, sustainable aluminum solutions across premium end markets worldwide."
Free cash flow from continuing operations was $30 million in the first quarter of fiscal 2022 compared to $146 million in the prior-year period, driven primarily by higher adjusted EBITDA and favorable metal price lag, largely offset by higher working capital requirements, including rising aluminum prices, according to the company.
"Novelis has achieved a milestone $2 billion of adjusted EBITDA on a trailing 12-month basis, driving rapid improvement in our net leverage ratio and providing significant financial flexibility to grow the business within our capital allocation framework," Devinder Ahuja, senior vice president and chief financial officer, says.
The company says it continues to maintain a strong total liquidity position of $2.3 billion as of June 30.
Recognizing the continued steady improvement in Novelis’ business and end markets, Novelis notes that July 22, S&P Global Ratings raised its issuer credit rating on Novelis to BB from BB-.
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Source: Recycling Today
Novelis benefits from increased shipments
<![CDATA[Atlanta-based aluminum rolling and recycling company Novelis Inc. saw its net income increase to $303 million in the first quarter of its 2022 fiscal year compared with a net loss of $61 million in the comparable quarter of the prior year, which was negatively affected by the COVID-19 pandemic and acquisition-related special items. Excluding special items in both years, first-quarter fiscal 2022 net income from continuing operations of $260 million is up significantly compared with $22 million in the prior year, driven mainly by higher after-tax adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). Net income attributable to the company’s common shareholder was $240 million for the quarter ended June 30 compared with a net loss of $79 million in the prior-year period. Novelis’ net sales increased 59 percent to $3.9 billion in the recently completed quarter compared with $2.4 billion in the prior-year period, primarily driven by a 26 percent increase in shipments, favorable product mix and higher average aluminum prices. Total flat-rolled product shipments increased to 973,000 metric tons compared to 774,000 metric tons in the prior-year period. The company says the increase primarily was a result of strong demand across end markets, particularly in beverage packaging…