Novelis Reports 33% Surge in Net Sales During Q3 Fiscal 2018

SEATTLE (Scrap Monster): Georgia, Atlanta-headquartered Novelis, Inc. has reported the third quarter results of fiscal 2018. The net income almost doubled during the quarter. Also, net sales surged higher by nearly one-third. It must be noted that the company had reported its best ever quarterly results in Q2 this fiscal.

According to company press release, it reported net income attributable to its common shareholder of $121 million. Year-on-year, the net income increased significantly by nearly 106%.  Novelis had reported a net income of $63 million during the corresponding quarter previous fiscal. Excluding special items, the company’s net income more than doubled from $67 million in Q3 of fiscal 2017 to $138 million in Q3 this fiscal.

The surge in net income excluding special items is mainly attributed to the 20% jump in adjusted EBITDA during the quarter. The adjusted EBITDA rose to $305 million in Q3 this fiscal. The higher shipment volumes, delivery of favorable product mix, increased operational efficiencies and higher automotive shipments boosted the performance during the quarter.

ALSO READ: Novelis Published 2017 Sustainability Report

The average aluminum prices continued to hit higher levels. The company reported notable jump in total shipment volumes. The strategic portfolio shift to higher conversion premium products too has contributed. Incidentally, the shipment of flat rolled products recorded 6% increase during the quarter. Over the previous fiscal, the automotive sheet shipments reported 12% surge in volumes.

Steve Fisher, President and CEO of Novelis noted that the company will continue to make strategic investments to grow its customer base by penetrating into more markets. The company had recently announced its decision to invest nearly $300 million to build a new automotive aluminum sheet manufacturing facility in Gutherie, Kentucky, the groundbreaking of which is scheduled to be held early spring. It had also signed a binding agreement to acquire leased Sierre, Switzerland operating facilities from Constellium.

Novelis expects the full year fiscal 2018 adjusted EBITDA to hit the upper end of the range $1,150-$1,200 million. The free cash flow is estimated to remain on the lower end of $400-$450 million range, mainly driven by higher aluminum prices. Also, the recently announced capital investments are unlikely to impact the 2018 free cash flow, the company said.

Novelis Inc. is the global leader in aluminum rolled products and the world's largest recycler of aluminum.