Aluminum rolling and recycling company Novelis Inc., Atlanta, has reported its financial results for the second quarter of its 2020 fiscal year.
Net income attributable to its common shareholder was $123 million for the second quarter compared with $116 million in the prior-year period. Excluding tax-effected special items, such as $32 million for restructuring actions, the company says its net income was $160 million in the second quarter of fiscal 2020 compared with $122 million in the prior-year period. Novelis attributes the 31 percent increase is to higher adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and a lower effective tax rate.
Adjusted EBITDA increased 5 percent over the prior-year period to $374 million, primarily driven by higher total shipments and favorable price and product mix, Novelis says, and partially offset by less favorable recycling benefits because of lower aluminum prices. Adjusted EBITDA per ton reached $448 in the quarter as compared to $440 in the prior-year period.
Net sales decreased 9 percent over the prior-year period to $2.9 billion for the second quarter of fiscal 2020, driven by lower average aluminum prices and local market premiums, partially offset by higher total shipments. Strong overall operational performance and solid demand for lightweight, sustainable aluminum products led to a 3 percent increase in flat-rolled product shipments to 835,000 metric tons, the company says.
"Our outstanding operational performance resulted in record second quarter shipments and strong financials, while we continue to make excellent progress on our strategic growth initiatives," says Steve Fisher, the company’s president and CEO. "Our customers continue to enhance their sustainability initiatives through more sustainable packaging, automotive closed-loop recycling systems and adopting more recycled content into their products.”
He adds, “I believe we are making the right investments, such as the recent announcement to increase recycling capacity at our Greensboro, Georgia, facility, to support our customers and deliver on our purpose of shaping a sustainable world together."
Novelis says that as of Sept. 30, the company reported a strong total liquidity position of $1.8 billion and a net leverage of 2.4 times.
Novelis announced July 26, 2018, that it had signed a definitive agreement to acquire Aleris Corp., headquartered in Cleveland. Having received conditional approval in the European Union and a clear path forward for approval in the U.S., the company says it continues to work closely with the Chinese State Administration for Market Regulation to receive its approval. Novelis expects to close the transaction by Jan. 21, 2020, the outside date under the merger agreement.