Novelis Inc. announced its first quarter fiscal year 2027 results, reporting a 23% year-over-year increase in net sales to $5.8 billion. The company also saw a 71% rise in net income attributable to its common shareholder, reaching $164 million. Adjusted EBITDA grew 24% to $516 million, driven by favorable market trends and operational efficiencies. Shipments were down 5% to 916 kilotonnes due to the Oswego production disruption. The Bay Minette plant commissioning is underway, and Oswego operations have restarted.
Novelis Reports Strong Q1 FY27 Financial Performance
Novelis Inc., a subsidiary of Hindalco Industries Limited, has released its financial results for the first quarter of fiscal year 2027 (ending June 30, 2026), showcasing robust top-line growth and improved profitability. Net sales surged by 23% to $5.8 billion compared to the same period last year. This increase was primarily attributed to higher average aluminum prices, partially offset by a 5% decrease in total rolled product shipments to 916 kilotonnes.
Profitability and Operational Highlights
The company’s net income attributable to its common shareholder saw a significant 71% increase, reaching $164 million. Excluding special items, net income rose by an impressive 128% to $265 million. Adjusted EBITDA grew 24% year-over-year to $516 million, boosted by lower aluminum scrap prices and cost efficiencies. The company noted an estimated $18 million net positive impact from the Oswego fires in Adjusted EBITDA, primarily due to insurance proceeds. Adjusted EBITDA per tonne shipped increased by 30% to $563.
Operational Updates and Future Outlook
While total rolled product shipments decreased by 5% to 916 kilotonnes, the company highlighted that an estimated 33 kilotonne reduction was due to the Oswego production disruption. The Oswego hot mill has restarted operations in early June, with production ramping up to meet demand. The commissioning process for the Bay Minette plant in Alabama is also underway, positioning Novelis for future growth.
Net cash used in operating activities was $455 million, a shift from the prior year’s net cash inflow, largely due to higher working capital and the impact of the Oswego fires. Adjusted free cash flow was an outflow of $1.1 billion. The company reported a net leverage ratio of 4.5x and liquidity of $2.1 billion as of June 30, 2026.
Segment Performance
The results showed varied performance across segments. In North America, Q1 FY27 shipments decreased by 3% while Adjusted EBITDA saw a 17% decline, partly due to lower shipments and unfavorable product mix related to Oswego fires. Europe experienced a 5% increase in shipments and a 44% rise in Adjusted EBITDA, driven by higher beverage and automotive shipments. Asia’s shipments increased by 8%, with Adjusted EBITDA up 30%, and South America saw a 7% increase in shipments and a notable 56% increase in Adjusted EBITDA.
Source: BSE
