Novelis Inc., a sustainable aluminum solutions provider and a leader in aluminum rolling and recycling, reported results for the first quarter of fiscal year 2023. Net income attributable to its common shareholder increased 28 percent versus the prior year to a record $307 million, while net income from continuing operations increased 1 percent to $307 million.
Excluding special items in both years, first quarter fiscal year 2023 net income from continuing operations increased 18 percent versus the prior year to $307 million due primarily to higher underlying Adjusted EBITDA, unrealized derivative gains and a lower tax provision in the current year, partially offset by a tax litigation gain benefiting prior year net income.
“Novelis once again delivered record financial performance in the first quarter, following our record performance last fiscal year,” said Steve Fisher, president and chief executive officer, Novelis Inc. “With our unmatched global footprint, broad product portfolio, and first mover capacity expansion plans to support growing demand for innovative and sustainable aluminum solutions, Novelis will continue to lead the aluminum industry in fostering a circular economy and driving long term value for our stakeholders.”
Net sales increased 32 percent to $5.1 billion for the first quarter of fiscal year 2023, compared to $3.9 billion in the prior year period, primarily driven by higher average aluminum prices and local market premiums. Total flat rolled product shipments were 962 kilotonnes, 1 percent lower than prior year shipments of 973 kilotonnes.
Adjusted EBITDA increased 1 percent to a record $561 million in the first quarter of fiscal year 2023, compared to $555 million in the prior year period, which included a $47 million gain related to a favorable decision in a Brazilian tax litigation. The underlying increase in adjusted EBITDA is primarily due to higher product pricing, favorable product mix on improved automotive and aerospace shipments, and lower metal costs, partially offset by high cost inflation and unfavorable foreign exchange translation.
Adjusted free cash flow from continuing operations was an outflow of $72 million in the first quarter of fiscal year 2023, higher than the prior year period outflow of $30 million due primarily to less favorable metal price lag. The company had a net leverage ratio (net debt/TTM adjusted EBITDA) of 2.2x at the end of the first quarter of fiscal year 2023, compared to 2.5x in the prior year period.
“In a strong demand but capacity constrained environment, we continue to focus on delivering high quality, high recycled content products to customers while continually optimizing our operations and portfolio,” said Devinder Ahuja, executive vice president and chief financial officer, Novelis.
The company continues to maintain a strong Total Liquidity position of $2.4 billion as of June 30, 2022.
Published in the October 2022 Edition