By Paul Ploumis
August 08, 2017 03:30:34 PM
SEATTLE (Scrap Monster): Novelis Inc., the global leader in aluminum rolled products and the world's largest recycler of aluminum has announced that it has more than tripled its net income during the first quarter of fiscal year 2018. The company reported net income of $101 million as compared with $24 million during corresponding quarter the previous fiscal. The phenomenal jump in net income was mainly driven by higher EBITDA and lower interest expense, the company press release noted.
Excluding tax-affected special items, Novelis reported net income of $103 million during the first quarter of fiscal 2018. This is significantly higher in comparison with $33 million in the first quarter of the prior fiscal. The rise in net income is mainly attributed to higher EBITDA. The adjusted EBITDA surged higher by 8% over the previous year from $268 million to $289 million, aided by higher average aluminum prices. In addition, the series of debt restructuring actions undertaken in fiscal 2017 led to lower interest rate expense, Novelis said.
Net sales reported 16% jump to total $2.7 billion during the first quarter of fiscal 2018. Strong operational performance resulted in record product shipments during the quarter. The flat rolled products shipments were up by 4% top 785 kilotonnes.
The company’s automotive strategy resulted in sharp 16% jump in shipments of higher conversion premium automotive products. Incidentally, the strategy focuses on delivering high-quality, value-added products by tapping major automotive growth markets.
Novelis reported negative free cash flow of $77 million for Q1 of fiscal 2018. The free cash flow has improved by $69 million as compared with negative free cash flow of $146 million during the first quarter of previous fiscal. On the other hand, capital expenditures dropped by $5 million over the year to $39 million during first quarter of fiscal 2018. As of June 30th, the company reported liquidity of $1.2 billion.
Commenting on the results, Steve Fisher, President and Chief Executive Officer for Novelis noted that the company with its global manufacturing footprint, state-of-the-art technology and closed-loop recycling systems has become a preferred choice for aluminum sheets by world’s leading automakers. The widespread acceptance of aluminum solutions in next-generation vehicles will expand Novelis’ market opportunities, he said. The company aims to increase its capacity to continue to ensure its leadership position in the automobile market, Fisher added.
While announcing the full year fiscal 2018 guidance, Novelis stated that the fiscal 2018 adjusted EBITDA is likely to range between $1,100 million and $1,150 million for the full year. The free cash flow for the full fiscal is expected to be between $400 million and $450 million, the company said.