Novelis reports 11% increase in adjusted EBITDA in Q1 FY2020 driven by higher shipments

Novelis, the world leader in aluminium rolling and recycling, released First Quarter of Fiscal Year 2020 Results and reported net income of US$127 million, compared to US$137 million in Q1 FY2019. Excluding tax-effected special items the net income stood at US$145 million compared to US$115 million in the prior year period.

Adjusted EBITDA increased 11 percent over Q1 FY2019 to US$372 million, primarily driven by higher total shipments as well as favourable price and product mix. Results were partially offset by less favourable recycling benefits due to lower aluminium prices.

Net sales dropped six percent to US$2.9 billion, driven by lower average aluminium prices and higher premiums. Shipments of flat rolled products increased four percent YoY 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 aluminium solutions," he added.

The company reported negative US$94 million of free cash flow for Q1 FY2020, including a three-fold increase in capital expenditures YoY to $162 million.

“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.

The acquisition process for Aleris Corporation continues to progress and is expected to close in Q4 CY2019, subject to customary closing conditions and regulatory approvals, the company release says.

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