Novelis reports Fourth Quarter and Full Fiscal Year 2024 Results

Novelis Inc., a leading sustainable aluminum solutions provider and the world leader in aluminum rolling and recycling, today reported results for the fourth quarter and full fiscal year 2024.

"Novelis delivered strong improvements in key financial metrics in the fourth quarter driven by lower operating costs, improved market demand and higher benefit from recycling," said Steve Fisher, president and CEO, Novelis Inc. "In doing so, we once again demonstrated the strength and resiliency of our business model, which is aided by our global presence and diverse product portfolio. We are building on our existing strengths with a number of expansion investments underway to capture sustainability-driven demand for lightweight and infinitely recyclable aluminum material, while enhancing profitability and shareholder returns."

Fourth Quarter Fiscal Year 2024 Results

Net sales decreased 7% versus the prior year period to $4.1 billion for the fourth quarter of fiscal year 2024, driven by lower average aluminum prices, partially offset by higher total shipments. Total flat rolled product shipments increased 2% to 951 kilotonnes in the fourth quarter of fiscal year 2024 versus the prior year period, due primarily to increased demand for beverage packaging sheet.

Net income attributable to our common shareholder was up 6% versus the prior year to $166 million in the fourth quarter of fiscal year 2024, due primarily to higher Adjusted EBITDA, partially offset by higher taxes and unfavorable timing of unrealized derivative losses. Adjusted EBITDA increased 28% versus the prior year to $514 million in the fourth quarter of fiscal year 2024. This significant improvement was primarily driven by favorable metal benefit from recycling and lower operating costs than the prior year period.

Full Year Fiscal Year 2024 Results

Net sales decreased 12% to $16.2 billion in fiscal year 2024, primarily driven by lower average aluminum prices and a 3% decrease in total flat rolled product shipments to 3,673 kilotonnes. The decrease in shipments is mainly due to lower beverage packaging shipments driven by customer inventory reductions in the first half of the fiscal year as well as softer demand for specialties products in a weaker macro-economic environment, partially offset by higher automotive shipments on strong demand. With customer inventory reductions complete, beverage packaging shipments increased sequentially each quarter of fiscal 2024 and demand continues to strengthen.

Fiscal 2024 net income attributable to our common shareholder decreased 9% versus the prior year to $600 million. The decrease is mainly driven by higher income tax provision and interest expense, as well as unfavorable timing of unrealized derivative losses in the current year compared to a gain in the prior year, partially offset by higher Adjusted EBITDA and improvement in metal price lag.

Adjusted EBITDA increased 3% to $1.9 billion in fiscal year 2024, compared to $1.8 billion in fiscal 2023, driven by higher product pricing, including some cost pass-throughs to customers, lower energy and freight costs, and favorable foreign exchange. These factors were partially offset by lower metal benefit, higher employment costs, an inventory timing effect from capitalizing high operating costs in the prior year, and lower volume.

Net cash flow provided by operating activities, continuing operations was $1.3 billion in fiscal year 2024 compared to $1.2 billion in the prior fiscal year, primarily due to higher Adjusted EBITDA and improvement in metal price lag. Adjusted Free Cash Flow was an outflow of $75 million in fiscal year 2024 compared to a prior year period inflow of $431 million, due primarily to a 73% year-over-year increase in capital expenditures, partially offset by higher cash flow from operating activities. Fiscal year 2024 capital expenditures total $1.4 billion and reflect the planned increase in strategic, sustainability-focused, capital investment projects that support increased long-term customer demand.

"We have a strong track record of successfully deploying capital to grow the business, as well as a balanced capital allocation profile," said Devinder Ahuja, executive vice president and CFO, Novelis Inc. "We are generating robust operating cash flow to fund our organic investments currently under way, and remain focused on executing our growth strategy and delivering long-term value creation."

The company had a net leverage ratio (Net Debt / trailing twelve months (TTM) Adjusted EBITDA) of 2.3x at the end of the fourth quarter of fiscal year 2024. Total liquidity stood at $2.3 billion as of March 31, 2024, consisting of $1.3 billion in cash and cash equivalents and $1.0 billion in availability under committed credit facilities.

Shares of Hindalco Industries Limited was last trading in BSE at Rs. 638.50 as compared to the previous close of Rs. 647.05. The total number of shares traded during the day was 119123 in over 3132 trades.

The stock hit an intraday high of Rs. 654.90 and intraday low of 629.45. The net turnover during the day was Rs. 75878315.00.

Source : Equity Bulls

Keywords

HindalcoIndustries INE038A01020 Novelis Q4 FY2024 ResultUpdate