Novelis Inc., the world leader in aluminum rolling and recycling, reported net income attributable to its common shareholder of $137 million for the first quarter of fiscal year 2019, compared to $101 million in the first quarter of fiscal 2018. Excluding tax-affected special items, the company reported net income of $113 million in the first quarter of fiscal 2019, up from $103 million in the prior period.
The increase in net income, excluding special items, is mainly due to a 15 percent increase in Adjusted EBITDA over the prior year to $332 million in the first quarter of fiscal 2019. This increase is attributed to the continued optimization of the investments the company has made to increase global rolling, automotive finishing, and recycling capacity to drive higher shipments, strengthen its product portfolio, and manage costs. Adjusted EBITDA per ton reached $417 in the quarter, as compared to $368 in the prior year period.
Net sales increased 16 percent over the prior year to $3.1 billion for the first quarter of fiscal 2019, driven by higher average aluminum prices, higher shipments, and more favorable product mix, partially offset by lower conversion premiums on some products. Shipments of flat rolled products increased two percent to 797 kilotonnes. “Outstanding operational performance with increased asset optimization and favorable market conditions contributed to another strong quarter,” said Steve Fisher, President and CEO of Novelis. “Our recent investment announcements in North America and Asia, along with the pending acquisition of Aleris, will diversify our product portfolio and increase our participation in high-demand, high-value markets to meet growing customer demand.”
The company reported negative $4 million of free cash flow for the first quarter of fiscal 2019, a $73 million improvement over the prior year. This increase is primarily a result of higher Adjusted EBITDA, lower cash interest due to the timing of payments in the prior year, and favorable metal price lag. These favorable items were partially offset by higher taxes and an increase in capital expenditures to $54 million in fiscal 2019, as compared to $39 million in the prior year period. “The progress Novelis has made to improve and transform the business is clearly reflected in our improved financial results, enabling us to make both organic and inorganic strategic growth investments,” said Devinder Ahuja, Senior Vice President and Chief Financial Officer for Novelis.
As of June 30, 2018, the company reported a strong liquidity position of $1.9 billion. In July, Standard & Poors rating agency upgraded the Novelis Corporate Family rating from B+ to BB-, and its senior unsecured rating from B to B+.
Source: Novelis Inc.
