“Novelis’ diverse product portfolio and lower input costs delivered another sequential increase in quarterly Adjusted EBITDA and a higher Adjusted EBITDA per tonne than expected, even as inventory reduction activity across the beverage packaging supply chain continued in the quarter,” said Steve Fisher, president and chief executive officer, Novelis Inc. “We believe this can destocking activity is nearly complete, and remain focused on strengthening and expanding Novelis’ capabilities to support our customers’ growing demand for sustainable aluminum sheet.”
Net sales decreased 20 percent versus the prior year period to $4.1 billion for the first quarter of fiscal year 2024, primarily driven by lower average aluminum prices and a 9 percent decrease in total flat rolled product shipments to 879 kilotonnes, partially offset by increased product pricing and favorable product mix. The decrease in shipments is mainly due to lower beverage can shipments, as well as unfavorable economic conditions impacting some specialties markets, mainly in building and construction. However, demand for premium automotive sheet remains strong and led to record automotive shipments in the quarter.
Net income attributable to their common shareholder decreased 49 percent versus the prior year to $156 million in the first quarter of fiscal year 2024, due mainly to lower Adjusted EBITDA, higher interest expense, and significantly higher gains on unrealized derivatives in the prior year that did not recur. Adjusted EBITDA decreased 25 percent versus the prior year to $421 million in the first quarter of fiscal year 2024, primarily driven by lower shipments, cost inflation, and less favorable metal benefit from recycling. These factors were partially offset by higher product pricing and favorable product mix.
Adjusted Free Cash Flow was an outflow of $349 million in the first quarter of fiscal year 2024, higher than the prior year period outflow of $73 million due primarily to a planned three-fold increase in capital expenditures as we ramp up strategic investments in new rolling and recycling capacity, and lower Adjusted EBITDA. The company had a net leverage ratio (Net Debt/TTM Adjusted EBITDA) of 2.7x at the end of the first quarter of fiscal year 2024.
The company had a strong Total Liquidity position of $2.4 billion, consisting of $1.0 billion in cash and cash equivalents and $1.4 billion in availability under committed credit facilities, as of June 30, 2023.
