Novelis Inc., a sustainable aluminum solutions provider and the leader in aluminum rolling and recycling, reported results for the third quarter of fiscal year 2024.
“Novelis delivered a substantial year-over-year improvement in Adjusted EBITDA and Adjusted EBITDA per tonne margin, in line with our expectations of continued margin recovery this fiscal year,” said Steve Fisher, president and chief executive officer, Novelis Inc.
Net sales decreased 6 percent versus the prior year period to $3.9 billion for the third quarter of fiscal year 2024, driven by lower average aluminum prices as shipments were in line with prior year levels. Total flat rolled product shipments were 910 kilotonnes in the third quarter of fiscal year 2024 compared to 908 kilotonnes in the prior year period. Shipments were flat due to a decline in specialties product shipments from muted economic conditions in some markets, though more than offset by continued growth in automotive shipments and a return in demand for beverage packaging sheet.
Net income attributable to their common shareholder significantly improved versus the prior year to $121 million in the third quarter of fiscal year 2024, due primarily to higher Adjusted EBITDA. Adjusted EBITDA increased 33 percent versus the prior year to $454 million in the third quarter of fiscal year 2024. This significant improvement was primarily driven by favorable metal benefit from recycling, higher pricing, and lower operating costs than the prior year, which was heavily impacted by high inflation and geopolitical instability.
Net cash flow provided by operating activities was $420 million in the first 9 months of fiscal year 2024 compared to $309 million in the prior fiscal year period, primarily due to favorable changes in working capital. Adjusted Free Cash Flow was an outflow of $517 million in the first nine months of fiscal year 2024, higher than the prior year period outflow of $170 million due primarily to higher capital expenditures, partially offset by higher cash flow from operating activities. Fiscal year-to-date 2024 capital expenditures total $960 million and reflect the planned increase in strategic investments in new rolling and recycling capacity under construction.
The company had a strong total liquidity position of $2.1 billion, consisting of $787 million in cash and cash equivalents and $1.4 billion in availability under committed credit facilities, as of December 31, 2023.
Novelis is constructing a state-of-the-art, greenfield rolling and recycling plant in Bay Minette, Alabama, that they anticipate will be able to initially produce 600 kilotonnes of finished goods for the beverage packaging and automotive markets in North America. This is the first fully integrated aluminum plant built in the U.S. in nearly 40 years, and the largest project in company history. With a high level of project engineering complete, and all key equipment and the majority of materials contracted, the project capital cost is now expected to be $4.1 billion, and to commission in the second half of calendar year 2026.