Novelis Inc., a global leader in sustainable aluminum solutions and the foremost player in aluminum rolling and recycling, has unveiled its financial results for the first quarter of fiscal year 2025. The company has demonstrated robust performance, marked by a significant rise in Adjusted EBITDA and shipment volumes, despite facing challenges due to recent flooding at its Swiss facility.

Key Financial Metrics for Q1 Fiscal Year 2025

Novelis Inc. reported a net income attributable to common shareholders of $151 million, reflecting a 3% decrease year-over-year. However, when excluding special items, the net income surged by 32% to $204 million. The company’s Adjusted EBITDA reached $500 million, up 19% compared to the previous year. This growth was driven by an 8% increase in rolled product shipments, totaling 951 kilotonnes, and a 10% rise in Adjusted EBITDA per tonne shipped, which now stands at $525.

Net sales for the quarter grew by 2% to $4.2 billion, primarily due to higher average aluminum prices and increased total shipments. The rise in flat rolled product shipments was largely attributed to normalised demand for beverage packaging sheet, reversing the prior year’s inventory reductions.

Operational Challenges and Impact

Despite these positive figures, Novelis faced setbacks from exceptional flooding at its Sierre, Switzerland, plant on June 30, 2024. The flooding, caused by unprecedented heavy rainfall, resulted in operational halts and financial setbacks, including fixed asset and inventory charges amounting to $40 million. The company estimates a total net cash impact of $80 million from this event, although insurance is expected to cover a portion of this.

Steve Fisher, President and CEO of Novelis Inc., commended the team’s efforts in achieving financial growth while navigating these challenges. Fisher highlighted the company’s strategic investments in organic growth projects and operational efficiencies, essential for capturing long-term market trends.

Financial Position and Future Outlook

Novelis maintained a disciplined approach to capital allocation, with a net leverage ratio of 2.4x as of June 30, 2024. The company’s total liquidity position stood at $2.2 billion, comprising $886 million in cash and $1.3 billion in committed credit facilities. Devinder Ahuja, Executive Vice President and CFO, emphasised the company’s commitment to prudent capital management while investing in future growth.

The company anticipates resuming production at the Sierre facility by the end of the second quarter, with insurance claims expected to partially offset the financial impact. The estimated net effect on Adjusted EBITDA is projected to be $30 million, primarily affecting the second quarter.

Novelis Inc.’s Q1 fiscal year 2025 results reflect a strong financial performance despite facing operational disruptions. The company’s focus on enhancing operational efficiencies and investing in growth initiatives positions it well for continued success, even amidst unforeseen challenges.

  Aditya Birla Group, Devinder Ahuja, Hindalco Industries Limited, Novelis Inc., Sierre Switzerland, Steve Fisher