Novelis Reports Fourth Quarter and Full Fiscal Year 2021 Results

Novelis Inc., the world leader in aluminum rolling and recycling, today reported net income attributable to its common shareholder of $176 million in the fourth quarter of fiscal year 2021, and net income from continuing operations of $180 million, up 179 percent and 186 percent, respectively, versus the prior year. Net income attributable to its common shareholder was $236 million for the full fiscal year 2021, and net income from continuing operations was $458 million, down 44 percent and up nine percent, respectively, versus the prior year.

Excluding special items in both years, fourth quarter fiscal 2021 net income from continuing operations was $172 million, up 12 percent versus the prior year driven mainly by higher after-tax Adjusted EBITDA partially offset by higher depreciation and amortization associated with the acquired Aleris business. For the full fiscal year, net income excluding special items decreased five percent versus the prior year to $561 million affected by pandemic-related impacts on first quarter profitability.

"Guided by our purpose and driven by the resilience of our people and the strength of our partnerships, we safely navigated this extraordinary year to achieve outstanding results," said Steve Fisher, President and CEO, Novelis Inc. "With the ongoing successful integration of Aleris, a diverse and innovative product portfolio, and unmatched geographic footprint, we have proven our ability to deliver sustainable aluminum solutions to customers in a way that resulted in record financial performance. Looking forward we will continue to pursue growth opportunities through organic investment, while working towards creating a more sustainable and circular future for our business, industry, and society."

Key achievements in fiscal 2021 include:

- Completed the acquisition of Aleris, generating initial run-rate integration cost synergies of $79 million and contributing to record full year shipments of 3.6 million tonnes, Adjusted EBITDA of $1.7 billion, net income from continuing operations of $458 million, and free cash flow from continuing operations of $740 million;

- Expanded our sustainability platform by committing to reduce our carbon footprint 30 percent by 2026 and become a net carbon-neutral company by 2050 or sooner;

- Committed to becoming a more diverse and inclusive workplace by increasing representation of women in leadership to 30 percent and to 15 percent in senior technical roles by 2024;

- Increased recycled content in our products to 61 percent in fiscal 2021;

- Strengthened our industry-leading automotive business with the commissioning of new auto finishing capacity in the U.S. and China, co-founding the innovative Alumobility ecosystem and offering an ultra-highstrength 7-series aluminum alloy to advance the continued adoption of aluminum in vehicles;

- Restructured long-term debt profile, reducing total debt by $2 billion since Aleris acquisition close in Q1 and refinancing approximately $1.1 billion of term loans through a „1¤7500 million eight-year senior unsecured green bond issuance in Europe, and a new $500 million secured term loan due 2028;

- Received credit ratings upgrades on Novelis unsecured notes by both S&P Global Ratings and Moody's Investor Services in March 2021.

Fourth Quarter Fiscal 2021 Highlights

Net sales increased 33 percent over the prior year to $3.6 billion for the fourth quarter of fiscal 2021, primarily driven by a 21 percent increase in shipments, favorable product mix and higher average aluminum prices. Total flat rolled product shipments increased to 983 kilotonnes, mainly reflecting the addition of the acquired Aleris business and record automotive and beverage can shipments, as well as continued strong demand for building and construction and other specialty flat rolled aluminum products.

Adjusted EBITDA increased 32 percent to $505 million in the fourth quarter of fiscal 2021 compared to $383 million in the prior year period. The increase in Adjusted EBITDA is due to higher organic volume, favorable metal benefits, and a $60 million positive EBITDA contribution from the acquired Aleris business. On a consolidated basis, Novelis achieved an Adjusted EBITDA per ton shipped of $514 in the fourth quarter, compared to $472 in the prior year.

Full Year Fiscal 2021 Highlights

Net sales increased nine percent versus the prior year to $12.3 billion in fiscal 2021, primarily driven by a ten percent increase in total shipments. Total flat rolled product shipments increased to 3,613 kilotonnes, mainly reflecting the addition of the acquired Aleris business, resilient beverage can demand, and a rapid recovery in demand for automotive and specialty products following a challenging first quarter impacted by the pandemic.

Adjusted EBITDA increased 16 percent to $1.7 billion in fiscal 2021 compared to $1.5 billion in fiscal 2020. The increase in Adjusted EBITDA is mainly due to a $200 million positive EBITDA contribution from the acquired Aleris business, favorable metal benefits, and good cost control, partially offset by unfavorable volume and product mix from lower automotive shipments in early fiscal year 2021.

Fiscal 2021 free cash flow from continuing operations nearly doubled to $740 million compared to $384 million in the prior year, driven primarily by higher Adjusted EBITDA, favorable working capital and lower capital expenditures.

The greenfield Guthrie, Kentucky, automotive finishing plant in the U.S. and the new automotive finishing line in Changzhou, China, were both commissioned in the second half of fiscal 2021. Customer qualification continues to ramp up at both facilities to meet strong demand for lightweight, automotive aluminum sheet. The recycling, casting and rolling expansion in Brazil also remains on track to commission in the middle of fiscal year 2022.

Shares of HINDALCO INDUSTRIES LTD. was last trading in BSE at Rs.398.7 as compared to the previous close of Rs. 412.85. The total number of shares traded during the day was 978251 in over 11886 trades.

The stock hit an intraday high of Rs. 417.7 and intraday low of 393.85. The net turnover during the day was Rs. 398106506.

Source : Equity Bulls

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