Novelis Reports Third Quarter Fiscal Year 2025 Results
Tuesday, February 11th, 2025
Q3 Fiscal Year 2025 Highlights
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Net income attributable to our common shareholder of $110 million, down 9% YoY; Net income attributable to our common shareholder excluding special items was $119 million, down 32% YoY
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Adjusted EBITDA of $367 million, down 19% YoY
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Rolled product shipments of 904 kilotonnes, down 1% YoY
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Adjusted EBITDA per tonne shipped of $406, down 19% YoY
Novelis Inc., a leading sustainable aluminum solutions provider and the world leader in aluminum rolling and recycling, today reported results for the third quarter of fiscal year 2025.
"We continue to see strong demand across our markets as customers increasingly ask for lower-carbon, higher-recycled-content aluminum solutions as a way to reduce their carbon footprint," said Steve Fisher, president and CEO, Novelis Inc. "With a leading industry average of 63% recycled content in our products in our last fiscal year, Novelis has been a pioneer in using recycled inputs to drive down carbon emissions. As others have begun to follow suit, competition for scrap aluminum has intensified and is creating significant pressure on scrap pricing, which is impacting our financial results. We believe we are well-positioned to face these challenges and have operational and cost efficiency initiatives underway to offset some of the pressures. At the same time, we are also developing new technologies that will allow us to expand the types of scrap inputs we can purchase for use in our system."
Third Quarter Fiscal Year 2025 Financial Highlights
Net sales for the third quarter of fiscal year 2025 increased 4% versus the prior year period to $4.1 billion, mainly driven by higher average aluminum prices as total rolled product shipments of 904 kilotonnes are largely comparable to the prior year period. Continued strong demand for beverage packaging sheet was offset by lower automotive and specialty shipments.
Net income attributable to our common shareholder decreased 9% versus the prior year to $110 million in the third quarter of fiscal year 2025. Net income attributable to our common shareholder, excluding special items, was down 32% year-over-year to $119 million and Adjusted EBITDA decreased 19% to $367 million in the third quarter of fiscal year 2025. The decreases in net income attributable to our common shareholder, excluding special items, and Adjusted EBITDA are primarily driven by higher aluminum scrap prices and unfavorable product mix. Adjusted EBITDA per tonne was down 19% year-over-year to $406.
Net cash flow provided by operating activities was $263 million in the first nine months of fiscal year 2025 compared to $420 million in the prior fiscal year period, primarily due to lower net income and unfavorable changes in working capital. Adjusted free cash flow was an outflow of $915 million in the first nine months of fiscal year 2025, higher than the prior year period outflow of $517 million due to higher capital expenditures and lower cash flow from operating activities. Total capital expenditures were $1.2 billion for the first nine months of fiscal year 2025, a 22% increase versus the prior year period, primarily attributed to strategic investments in new rolling and recycling capacity under construction, most notably in the U.S. for Bay Minette. The company had a net leverage ratio (Adjusted Net Debt / trailing twelve months (TTM) Adjusted EBITDA) of 2.9x at December 31, 2024
"Novelis is leading the industry in first-mover investments to capture growing market opportunities," said Devinder Ahuja, executive vice president and CFO, Novelis Inc. "We intend to fund those investments largely through internally generated cash flow while maintaining balance sheet discipline to ensure we stay in a net leverage ratio of approximately 3.5x during this strategic investment cycle."
The company had a total liquidity position of $1.6 billion, consisting of $791 million in cash and cash equivalents and $790 million in availability under committed credit facilities, as of December 31, 2024. In January, 2025, the company issued $750 million in senior unsecured notes due January 2030, with the proceeds primarily used to repay outstanding borrowings under our ABL revolver.
Third Quarter Fiscal Year 2025 Earnings Conference Call
Novelis will discuss its third quarter fiscal year 2025 results via a live webcast and conference call for investors at 7:00 a.m. EST/5:30 p.m. IST on Monday, February 10, 2025. The webcast link, presentation materials and access information can also be found at novelis.com/investors. To view slides and listen to the live webcast, visit: https://event.choruscall.com/mediaframe/webcast.html?webcastid=jkklO5W7. To participate by telephone, participants are requested to register at: https://services.incommconferencing.com/DiamondPassRegistration/register?confirmationNumber=13750593&linkSecurityString=1daa6802b2
