Novelis 3QFY22 Results: Net income grows 49% Y-o-Y on improved flat rolled products sales of $4.3 billion

On Monday, February 7, Novelis Inc., the world leader in aluminium rolling and recycling, announced its 3QFY2022 financial and operational results ended December 31, 2021, whereby it revealed the net income attributable to common shareholder at $262 million. That was year-on-year increase of 48.86 per cent from $176 million on 33 per cent higher sales to $4.3 billion in the third quarter, compared to $3.2 billion sales in the prior year period, primarily driven by higher average aluminium prices. According to the report published, the company’s net income from continuing operations increased to $259 million in 3QFY22 from $195 million in 3QFY21.

However, on the other hand, flat rolled products shipments slightly dipped in Q3 FY2022 from 933,000 tonnes a year ago to 930,000 tonnes, due to continued semiconductor chip shortage impacting the automotive industry. Shipments in total nine months stood at 2.871 million tonnes.

Adjusted EBITDA stayed strong at $506 million, compared to $501 million in the prior year, attributing to favourable product pricing and mix. Adjusted EBITDA per tonne shipped also increased to $544 in the third quarter of FY2022, compared to $537 during the same period last year.

Adjusted EBITDA in nine months (from April to December 2021) totalled $1,614 million, up by 33.50 per cent from $1,209 million a year earlier.

"Our strong third quarter results reflect our team's ability to deftly navigate headwinds mainly arising from global supply chain disruptions," said Steve Fisher, President and Chief Executive Officer of Novelis Inc. "We will continue to manage through these challenges, while keeping our eyes on our strategic growth path and meeting growing demand for high-recycled-content, sustainable aluminum products."

Novelis also reported in its Q3 results that since October 2021, the company has been announcing several capital expansion projects aimed at increasing capacity and capabilities and achieving its sustainability goal to become net carbon-neutral by 2050. In January 2022, Novelis announced plans to build a highly advanced recycling centre worth$365 million for the U.S. automotive market, with an annual casting capacity of 240 kilotonnes of sheet ingot.

Fiscal year-to-date adjusted free cash flow from continuing operations was $217 million compared to the prior year period of $331 million. Devinder Ahuja, Executive Vice President and Chief Financial Officer of Novelis Inc., said: "Novelis has generated more than $1 billion in trailing-twelve-month adjusted free cash flow before capital investments, despite the significant impact from higher aluminum prices this year.”

He added, “Continued strong cash generation, coupled with our disciplined capital allocation strategy, enables us to continue to strategically invest in sustainably growing the business while remaining within our targeted net leverage range."