Novelis Reports Best-Ever Quarterly Results, Income Surged 30%

SEATTLE (Scrap Monster): Georgia, Atlanta-headquartered Novelis Inc. has reported net income of $307 million for the second quarter of fiscal 2018, delivering its best-ever quarterly result. This is upon comparison with a net loss of $89 million reported during the corresponding quarter a year before. Excluding special items, the net income totaled $78 million, as compared with $60 million during the second quarter of fiscal 2017.

The adjusted EBITDA shot up to a record high of $302 million during the quarter, jumping higher by 12% over the previous year. This was mainly on account of operational efficiencies, favorable metal costs and record high shipments. Meantime, beverage can prices edged lower in Q2 fiscal 2018.

Net sales totaled $2.8 billion, nearly 18% higher over the prior year, mainly driven by strong aluminum prices and ramp-up in total shipments. The shipments of flat rolled products surged higher to an all-time quarterly record of 802 kilotonnes. Shipments from across various regions reported robust growth. The largest jump in shipments was reported by the automotive sheet sector, which reported significant jump in customer demand growth. The sector shipments were up by 12% when matched with the previous year. The liquidity of the company as of September 30, 2017 stood at $1.6 billion.

Steve Fisher, President and Chief Executive Officer for Novelis noted that the company witnessed vigorous growth in demand for lightweight, high-strength aluminum sheets from automobile industry. The company will continue to make further investments to expand its product mix to cater to growing demands from automotive sector as well as other industries that make use of innovative aluminum solutions.

On account of strong performance during the first half yearly period of the fiscal and the existing positive market sentiments, the company has raised its full year adjusted EBITDA guidance for fiscal 2018 to $1,150 million-$1,200 million. Meantime, the company has kept its guidance of free cash flow unchanged at $400 million-$450 million.

Novelis forecasts strong demand for rolled aluminum in 2018 from automotive sector. Incidentally, the company’s supply has been unable to meet strong customer demand. The shift to electric vehicles will further boost aluminum demand.

Novelis, a subsidiary of India-based Hindalco Industries Ltd. is is the leading producer of flat-rolled aluminum products and the world’s largest recycler of aluminum.