Novelis sees tapering sales in most recent quarter

Novelis Inc. reports shipments of rolled aluminum products fell more than 5 percent year on year in the second quarter of its 2024 fiscal year that ran from July 1 to Sept. 30.

The Atlanta-based company, which consumes aluminum scrap at its melt shops in the United States and several other nations, saw its net income fall 14 percent year on year in its most recently completed quarter, while earnings before interest, taxes, depreciation and amortization (EBITDA) declined by 4 percent.

Offering better news, Novelis' adjusted EBITDA per metric ton of product shipped, at $519, was up by 1 percent compared with a year ago.

“We are pleased to see another quarter of sequential improvement in adjusted EBITDA, driven by initial demand recovery in our core beverage packaging sheet end market, as industry supply chain destocking activity is largely behind us,” Novelis President and CEO Steve Fisher says.

“We delivered a solid second quarter, demonstrating the resilience of our business on account of our diverse customer base across premium end markets, our leadership position in aluminum recycling, a solid balance sheet and the scale and efficiency of our global operations."

In addition to reduced shipments, net sales decreased 14 percent year on year because of lower average aluminum prices this year.

Regarding the 5 percent shipment decrease, the company says it was mainly because of lower beverage packaging shipments compared with prior year record levels, as well as challenging economic conditions affecting some specialties markets, mainly in building and construction, partially offset by higher automotive shipments on stronger customer demand.

Fisher sees reasons for optimism, commenting, “The business will only be further strengthened in the coming years as we complete strategic investments underway in new rolling and recycling capacity.”

The company is a subsidiary of India-based Hindalco Industries Ltd. and the Aditya Birla Group.