Strong operational performance in favorable market conditions deliver exceptional results
First Quarter Fiscal Year 2020 Highlights
- Net income attributable to common shareholder of $127 million; excluding special items, net income of $145 million
- Adjusted EBITDA of $372 million
- Net sales of $2.9 billion
- Shipments of 830 kilotonnes
Novelis Inc., the world leader in aluminum rolling and recycling, today reported net income attributable to its common shareholder of $127 million for the first quarter of fiscal year 2020, compared to $137 million in the prior year period. Excluding tax-effected special items, such as $33 million in favorable metal price lag in the prior year, the company reported net income of $145 million in the first quarter of fiscal 2020, compared to $115 million in the prior year period. This 26 percent increase is primarily due to higher Adjusted EBITDA.
Adjusted EBITDA increased 11 percent over the prior year period to $372 million in the first quarter of fiscal 2020, primarily driven by higher total shipments as well as favorable price and product mix, partially offset by less favorable recycling benefits due to lower aluminum prices. Adjusted EBITDA per ton reached $448 in the quarter, as compared to $419 in the prior year period.
Net sales decreased six percent over the prior year period to $2.9 billion for the first quarter of fiscal 2020, driven by lower average aluminum prices and local market premiums, partially offset by higher total shipments and more favorable product price and mix. Shipments of flat rolled products increased four percent over the prior year to 830 kilotonnes.
“Novelis’ continued success is based on its ability to deliver high-quality products to customers and its focus on optimizing manufacturing operations,” said Steve Fisher, President and CEO, Novelis Inc. “With a strong balance sheet and commitment to sustainable innovation, we are well positioned to make strategic investments in capacity as well as R&D to meet growing demand for lightweight aluminum solutions.”
The company reported negative $94 million of free cash flow for the first quarter of fiscal 2020, including a three-fold increase in capital expenditures year-over-year to $162 million mainly to support strategic capacity expansion projects underway in the US, China and Brazil. Free cash flow before capital expenditures improved 36 percent over the prior year period to $68 million, driven primarily by higher Adjusted EBITDA and favorable working capital from lower aluminum prices and inventory levels.
|(in $ millions, non-GAAP measures)||
Three Months Ended June 30
|Free cash flow||
Free cash flow before capital expenditures
“Our strategic capital projects to increase rolling, recycling and finishing capacity continue to progress on time and on budget,” said Devinder Ahuja, Senior Vice President and Chief Financial Officer, Novelis Inc. “Our focus on continuous operational improvement to fully leverage our existing capacity will allow us to continue to deliver strong results in favorable market conditions.”
As of June 30, 2019, the company reported a strong total liquidity position of $1.7 billion and a net leverage ratio of 2.5x.
On July 26, 2018, Novelis announced it signed a definitive agreement to acquire Aleris Corporation. The acquisition continues to progress and is expected to close in the fourth quarter of calendar year 2019, subject to customary closing conditions and regulatory approvals.
First Quarter of Fiscal Year 2020 Earnings Conference Call
Novelis will discuss its first quarter of fiscal year 2020 results via a live webcast and conference call for investors at 8:00 a.m. ET on Tuesday, August 6, 2019. To view slides and listen only, visit the web at https://cc.callinfo.com/r/1w8nrkn5uwjtq&eom. To join by telephone, dial toll-free in North America at 800 582 4086, India toll-free at 1800 266 2125 or the international toll line at +1 212 231 2911. Presentation materials and access information may also be found at novelis.com/investors.
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