Novelis’ Q4 net income grows 29 percent

The company says fiscal 2019 net sales increase driven by higher average aluminum prices.


Atlanta-based Novelis Inc., a world leader in aluminum rolling and recycling, has reported net income attributable to its common shareholder of $103 million for the fourth quarter of the fiscal year 2019 and $434 million for the full fiscal year.

According to a Novelis press release, the company grew its full fiscal year 2019 net income by 11 percent to $468 million and fourth quarter net income 29 percent to $130 million, attributing the increases to a record adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for both the quarter and full year.

Here are some highlights of the report:

  • Net sales increased 1 percent compared with the prior year to $3.1 billion for the fourth quarter of fiscal 2019, driven by higher total shipments, partially offset by lower average aluminum prices. 
  • Adjusted EBITDA for the fourth quarter of fiscal 2019 increased 12 percent to $357 million compared with $319 million in the prior year. The increase reflects the favorable impacts from higher shipments, improved product mix and favorable metal costs.
  • Net sales increased 8 percent to $12.3 billion in fiscal 2019. The increase was driven by higher average aluminum prices and a 3 percent increase in shipments of flat-rolled products to 3,274 kilotons.
  • Adjusted EBITDA grew 13 percent to $1.4 billion in fiscal 2019 compared with $1.2 billion in 2018. 
  • The company generated $408 million of free cash flow in fiscal 2019. Free cash flow before capital expenditures improved $127 million over the prior year, driven primarily by higher adjusted EBITDA.

Novelis on key operational and innovative achievements in fiscal 2019:

The company established three Customer Solution Centers to accelerate collaborative innovation between Novelis and automakers for the next generation of vehicle design. Novelis also developed “innovative products and processes to accelerate the adoption of lightweight aluminum across end markets,” including pioneering the first aluminum sheet battery enclosure for the rapidly growing electric vehicle and battery markets.

Novelis partnered with Volvo Car Group to establish an automotive closed loop recycling system in Europe to reduce CO2 emissions, decrease waste and increase recyclability of aluminum.

The company says it continued to drive operational excellence initiatives, including improvements in production recovery rates that control operating costs and unlock capacity to achieve record shipments. Novelis also leveraged the company's extensive recycling footprint to “capitalize on favorable market conditions and increase the recycled content in its shipments from 57 percent to 61 percent for the full year.”

"Our year-end financial results are the best in company history, reflecting a continued focus on further improving operational efficiencies and customer centricity," Novelis President and CEO Steve Fisher states. “It was also an important year in innovation, with the introduction of the first aluminum sheet battery enclosure, establishment of Customer Solution Centers and the development of new, high-strength alloys that will further enhance our existing portfolio of Advanz automotive products. We are also continuing to deliver on our purpose of shaping a sustainable world by increasing the amount of recycled content in our products, reducing CO2 emissions across the supply chain and maximizing the advantages of sustainable, lightweight aluminum to benefit our customers, partners and the communities where we live and work."

Novelis on several strategic actions in fiscal 2019:

The company signed a definitive agreement to purchase Beachwood, Ohio-based aluminum producer Aleris for approximately $2.6 billion, including the assumption of debt, which is expected to close in the third quarter of 2019.

In addition, Novelis began construction on organic expansion plans to increase automotive capacity in the U.S. and China and increase rolling, casting and recycling capacity in Brazil. The company also completed the acquisition of key operating facilities and manufacturing assets in Sierre, Switzerland.

"Our record operational and financial performance in fiscal 2019 has firmly positioned Novelis to embark on our next phase of growth," states Devinder Ahuja, senior vice president and chief financial officer, Novelis. "Long-term customer demand across end markets continues to steadily grow, our operations are running very well, and we continue to generate strong cash flow to fund strategic investments for our future."

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