Novelis Inc., a subsidiary of Hindalco Industries, released its fiscal year 2026 results. Despite challenges from fires at its Oswego plant, the company reported $18.4 billion in net sales for the full year, a 7% increase. While the Oswego incidents significantly impacted short-term profitability, the company remains confident, citing strong underlying business momentum, resilient demand for aluminum products, and successful progress on its $5 billion greenfield project in Bay Minette, Alabama.
Fiscal Year 2026 Financial Performance
For the full fiscal year ended March 31, 2026, Novelis recorded net sales of $18.4 billion, up 7% compared to the prior year, driven primarily by higher average aluminum prices. However, total rolled product shipments decreased by 5% to 3,557 kilotonnes, largely due to production interruptions caused by significant fires at the Oswego, New York plant. Adjusted EBITDA for the year reached $1.6 billion, a 9% decrease year-over-year, impacted by an estimated negative $104 million from the Oswego fires and $143 million from tariffs.
Fourth Quarter Results
In the fourth quarter (January-March 2026), net sales increased by 4% to $4.8 billion. The company reported a net loss of $84 million, compared to a net income of $294 million in the same period last year, primarily due to $630 million in pre-tax net losses associated with the Oswego fire events. Adjusted EBITDA for the quarter was $459 million, a 3% decline compared to the previous year.
Operational Updates and Strategic Projects
Novelis is focused on recovery and growth. The Oswego hot mill is expected to return to service in the coming weeks, ahead of the previous end-of-June estimate. The company continues to advance the Bay Minette project, a state-of-the-art aluminum plant, with the cold mill beginning the commissioning process in March. The total capital investment for this project remains in the order of $5 billion, with $3.2 billion invested through the end of fiscal year 2026.
Cost Reduction and Future Outlook
The company has successfully executed a structural cost-reduction initiative, exiting fiscal year 2026 with run-rate savings exceeding $200 million, significantly surpassing its original $75 million target. Looking ahead, Novelis has raised its total savings target to $350-400 million by the end of fiscal year 2028. With strong business momentum and key projects nearing completion, the company anticipates a return to positive free cash flow by the end of fiscal year 2027.
Source: BSE
