Q2 Fiscal Year 2024 Highlights
- Net income attributable to our common shareholder of $157 million, down 14% YoY; Net income excluding special items was $180 million, down 11% YoY
- Adjusted EBITDA of $484 million, down 4% YoY
- Rolled product shipments of 933 kilotonnes, down 5% YoY
- Adjusted EBITDA per tonne shipped of $519, up 1% YoY
- Novelis Inc., a leading sustainable aluminum solutions provider and the world leader in aluminum rolling and recycling, today reported results for the second quarter of fiscal year 2024.
"We are pleased to see another quarter of sequential improvement in Adjusted EBITDA, driven by initial demand recovery in our core beverage packaging sheet end market as industry supply chain destocking activity is largely behind us," said Steve Fisher, president and CEO, Novelis Inc. "We delivered a solid second quarter, demonstrating the resilience of our business on account of our diverse customer base across premium end markets, our leadership position in aluminum recycling, a solid balance sheet, and the scale and efficiency of our global operations. The business will only be further strengthened in the coming years as we complete strategic investments under way in new rolling and recycling capacity."
Net sales decreased 14% versus the prior year period to $4.1 billion for the second quarter of fiscal year 2024, primarily driven by lower average aluminum prices and a 5% decrease in total flat rolled product shipments to 933 kilotonnes, partially offset by increased product pricing and favorable product mix. The decrease in shipments is mainly due to lower beverage packaging shipments compared to prior year record levels, as well as challenging economic conditions impacting some specialties markets, mainly in building & construction, partially offset by higher automotive shipments on stronger customer demand.
Net income attributable to our common shareholder decreased 14% versus the prior year to $157 million in the second quarter of fiscal year 2024, due mainly to lower Adjusted EBITDA. Adjusted EBITDA decreased 4% versus the prior year to $484 million in the second quarter of fiscal year 2024, primarily driven by lower shipments, less favorable metal benefit from recycling, and a prior year favorable impact from capitalizing high operating costs into inventory. These factors were partially offset by higher product pricing, favorable product mix, and some lower freight costs.
Net cash flow provided by operating activities was $290 million in the first six months of fiscal year 2024 compared to $196 million in the prior fiscal year period, primarily due to favorable changes in working capital, partially offset by lower Adjusted EBITDA. Adjusted Free Cash Flow was an outflow of $300 million in the first six months of fiscal year 2024, higher than the prior year period outflow of $96 million due primarily to a planned increase in capital expenditures as we ramp up strategic investments in new capacity, partially offset by higher cash flow from operating activities. The company had a net leverage ratio (Net Debt / trailing twelve months (TTM) Adjusted EBITDA) of 2.7x at the end of the second quarter of fiscal year 2024.
"We are delivering on our expectations for Adjusted EBITDA per tonne recovery this year, with Adjusted EBITDA per tonne again improving sequentially to $519 in the second quarter, demonstrating the operating leverage we gain with higher shipments," said Devinder Ahuja, executive vice president and CFO, Novelis Inc.
The company had a strong total liquidity position of $2.3 billion, consisting of $1.2 billion in cash and cash equivalents and $1.1 billion in availability under committed credit facilities, as of September 30, 2023.
