Novelis, the world leader in aluminum rolling and recycling, today reported net income of $101 million for the first quarter of fiscal year 2018, compared to net income of $24 million in the prior year period. Excluding tax-affected special items, the company reported net income of $103 million in the first quarter of fiscal 2018, up from $33 million reported in the first quarter of fiscal 2017. The year-over-year increase in net income is driven primarily by higher EBITDA and lower interest expense following debt refinancing actions in fiscal 2017.
“Our automotive strategy, enhanced operational performance and strong customer relationships resulted in record first quarter shipments while also increasing Adjusted EBITDA per ton,” said Steve Fisher, President and Chief Executive Officer for Novelis. “Leveraging our unmatched global manufacturing footprint, innovative technology and closed-loop recycling systems, Novelis has become a preferred choice for automotive aluminum sheet. As more and more automakers turn to aluminum solutions to produce the next generation of vehicles, we are actively looking at opportunities to increase capacity to support our customers and reinforce our leadership position in this growing market.”
Adjusted EBITDA, defined excluding metal price lag, increased eight percent to $289 million for the first quarter of fiscal 2018 from $268 million in the prior year period, primarily as a result of higher shipments, ongoing operational improvements, and favorable product mix, partially offset by pricing pressures in beverage can.
Net sales increased 16 percent to $2.7 billion for the first quarter of fiscal 2018. This was driven by a four percent increase in total shipments of flat rolled products to 785 kilotonnes, including a 16 percent increase in shipments of higher conversion premium automotive products, as well as higher average aluminum prices.
The company reported negative free cash flow of $77 million for the first quarter of fiscal 2018 as compared to negative $146 million in the prior year period. The $69 million improvement in free cash flow over the prior year was primarily a result of higher EBITDA and lower cash interest payments. Capital expenditures in the first quarter of fiscal 2018 were $39 million, $5 million lower than the prior year.
“Our continued strong financial performance in the first quarter, following a record year in fiscal 2017, provides a clear path to achieve another record year for Adjusted EBITDA and free cash flow in fiscal 2018,” said Devinder Ahuja, Senior Vice President and Chief Financial Officer for Novelis.
As of June 30, 2017, the company reported a strong liquidity position of $1.2 billion.
