Novelis Inc., the world leader in aluminum rolling and recycling, today reported net income attributable to its common shareholder of $107 million for the third quarter of fiscal year 2020, compared to $78 million in the prior year period. Excluding tax-effected special items in both years, the company reported net income of $132 million in the third quarter of fiscal 2020, compared to $101 million in the prior year period. This 31 percent increase is primarily due to higher Adjusted EBITDA.
Adjusted EBITDA increased seven percent to $343 million in the third quarter of fiscal 2020 compared to $322 million in the prior year period, primarily driven by portfolio optimization efforts, operating cost efficiencies, and favorable foreign exchange, partially offset by less favorable recycling benefits due to lower aluminum prices. Adjusted EBITDA per ton reached $430 in the quarter, as compared to $403 in the prior year.
Net sales decreased ten percent from the prior year period to $2.7 billion for the third quarter of fiscal 2020, driven by lower average LME aluminum prices and local market premiums. Flat rolled product shipments were in line with the prior year, at 797 kilotonnes.
“Novelis continues to perform very well both operationally and financially, delivering another set of strong results in the third quarter,” said Steve Fisher, President and CEO, Novelis Inc. “At the same time, we have made excellent progress advancing our major organic expansion projects in the U.S., China and Brazil, allowing us to continue to grow with our customers and better compete against steel and other materials.”
Each of these projects continue to progress on time and on budget. Notably, the company’s greenfield automotive finishing plant in Guthrie, Kentucky, is in the commissioning process, with commercial shipments to customers expected to commence in the coming months.
Fiscal year-to-date free cash flow before capital expenditures improved 43 percent over the prior year to $483 million, driven primarily by higher Adjusted EBITDA as well as favorable working capital combined with lower aluminum prices. Capital expenditures doubled year-over-year to $422 million for the first nine months of fiscal 2020, mainly to support strategic investments in incremental rolling, recycling and automotive finishing capacity. As a result of this increased capital spending, fiscal 2020 free cash flow of $61 million compares to $127 million in the prior year period.
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SOURCE: Novelis
