Novelis increases rolled product shipments, adjusted EBITDA in Q1 of its 2025 fiscal year

Aluminum rolling and recycling company Novelis Inc., headquartered in Atlanta, says its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of its 2025 fiscal year totaled $500 million, a 19 percent year-over-year increase, while its rolled product shipments grew by 8 percent to 951,000 metric tons. The company also reports adjusted EBITDA per metric ton shipped of $525, a 10 percent increase year over year.

"Novelis delivered meaningful year-over-year improvement across a number of financial metrics in the quarter, led by a double-digit increase in beverage packaging shipments benefiting from normalized demand, our broad global presence and solid customer relationships," Novelis President and CEO Steve Fisher says. "I commend our teams for staying focused on driving operational efficiencies and serving our customers, while at the same time continuing to advance organic growth projects underway as we strategically invest to capture strong mid- to long-term growth trends."

Quarterly highlights

Net sales of $4.2 billion increased 2 percent versus the prior-year period thanks in part to higher average aluminum prices and higher total shipments, Novelis says.

However, net income attributable to the company’s common shareholder decreased 3 percent versus year over year to $151 million given initial charges associated with flooding at its Sierre, Switzerland, plant at the end of June, as well as higher restructuring and unfavorable metal price lag, largely offset by higher adjusted EBITDA. Net income attributable to our common shareholder, excluding special items, was up 32 percent year over year to $204 million, while adjusted EBITDA increased 19 percent to $500 million, primarily driven by higher volume and favorable product pricing, partially offset by less favorable product mix and higher cost.

Net cash flow provided by operating activities was $74 million in the first three months of fiscal year 2025 compared with an outflow of $32 million in the first quarter of its 2024 fiscal year, which Novelis primarily attributes to higher adjusted EBITDA and favorable changes in working capital. Adjusted free cash flow was an outflow of $280 million in the first three months of its 2025 fiscal year, an improvement compared with the prior-year period outflow of $349 million resulting from higher cash flow from operating activities. Total capital expenditures were $348 million for the recently completed quarter, primarily attributed to strategic investments in new rolling and recycling capacity under construction.

"We continue to take a prudent approach to capital allocation, investing in our future while maintaining a disciplined net leverage position," says Devinder Ahuja, executive vice president and chief financial office at Novelis.

In its earnings presentation, Novelis notes that its $4.1 billion investment in Bay Minette, Alabama, remains on track for commissioning that is expected to begin in the second half of the 2026 calendar year, with its beverage packaging capacity fully contracted, and that it began commissioning its Guthrie, Kentucky recycling center, which it broke ground on in May 2022. The company says the facility will be able to cast 240,000 tons of sheet ingot for its automotive customers per year. The facility is expected to reduce its carbon emissions by more than 1 million tons annually and to add approximately 140 jobs.

Additionally, Novelis is investing approximately $90 million to more than double recycling capacity for used beverage cans (UBCs) at its plant in Latchford, England, by 85,000 metric tons annually, with the construction of a new dross house and three new bag houses and installation of shredding, sorting, decoating and melting technologies.

RELATED: Novelis receives $2.5 million grant for Alabama project

Flooding in Sierre

On June 30, Novelis’ Sierre plant experienced “exceptional flooding” from unprecedented heavy rainfall. While the company says employees were safely evacuated, water entered the plant, halting operations. As a result, Novelis recognized fixed asset charges of $30 million and inventory charges of $10 million during the first quarter. Additionally, it expects to incur costs related to repairs, cleanup, business interruption and other costs related to this event until facility operations are restored.

The plant is insured for property damage and business interruption losses related to such events, subject to deductibles and policy limits, Novelis says. The company will record an insurance receivable based on the anticipated insurance proceeds when they can be reliably estimated. Its current timeline suggests production will be restarted by the end of the second quarter of its 2025 fiscal year, with the total net cash impact from the flood, after insurance, estimated to be $80 million. The net impact to adjusted EBITDA is estimated to be $30 million, the majority of which will occur in the second quarter.

In its presentation accompanying its quarterly financial report, Novelis says it is working with customers and leveraging its European and global presence to reroute materials to minimize customer impact related to this event.