Novelis net sales continue falling 3.9% Q-o-Q on lower aluminium rolled-product shipments during Q3 FY2024

On Monday, February 12, Novelis, the world’s leading producer of aluminium flat-rolled products and recycler, announced the third quarter results for the financial year of 2023-24, revealing net sales of US$3.94 billion, down by 3.9 per cent Q-o-Q from US$4.1 billion and 6.19 per cent less Y-o-Y than US$4.2 billion.

In nine months of the year, the company’s net sales amounted to US$12.133 billion versus US$14.089 billion during the corresponding period of the previous year.

The sequential decline in net sales during Q3 FY2024 could be attributed to the sluggish aluminium prices and lower shipments. According to the report, Novelis’ shipments during the third quarter of FY2024 totalled 910,000 tonnes – 2.47 per cent less than 933,000 tonnes in Q2 FY2024. On a year-on-year basis, the shipments in Q3 FY2024 remained flat compared to 908,000 tonnes.

Muted economic condition in some markets was a primary reason behind the feeble net sales but was offset to a large extent by the growth in automotive shipments and return in demand for beverage packaging sheet.

Novelis’ net income attributable to common shareholder was US$121 million in Q3, reflecting a Q-o-Q fall of 22.9 per cent from US$157 million but a Y-o-Y surge of 908 per cent from US$12 million due to higher Adjusted EBITDA. In Q3 FY2024, Novelis’ adjusted EBITDA grew by 33 per cent Y-o-Y, amounting to US$454 million, driven by favourable metal benefit from recycling, higher pricing, and lower operating costs than the prior year, which was heavily impacted by high inflation and geopolitical instability.

Novelis’ net income in nine months of FY2024 totalled US$434 million, down by 13.55 per cent from US$502 million.

Devinder Ahuja, executive vice president and CFO of Novelis Inc., said: "We continue to expect adjusted EBITDA per tonne to return to a sustainable $525 level beginning this fiscal fourth quarter as shipments seasonally improve and we drive more operating leverage. Looking ahead, we believe there is opportunity for further margin expansion over time as we progress through our current period of disciplined, transformational capital investment to capture market growth."

Steve Fisher, president and CEO of Novelis Inc., said: "Novelis delivered a substantial year-over-year improvement in Adjusted EBITDA and Adjusted EBITDA per tonne margin, in line with our expectations of continued margin recovery this fiscal year. Our unmatched global scale, diversified end market product portfolio and recycling leadership is evident in our strong third quarter results and makes us an essential partner of choice for our customers. These differentiators also allow us to execute our ongoing strategy to invest in growth and organically increase our rolling and recycling capacity to shape a more sustainable future."

Novelis had a strong liquidity position of $2.1 billion, consisting of $787 million in cash and cash equivalents and $1.4 billion in availability under committed credit facilities, as of December 31, 2023.