Novelis posts a 35% plunge in net income from continuing operations for FY2023 owing to weaker shipments

Novelis, the world’s leading flat-rolled aluminium producer and aluminium recycler, announced its fourth quarter and full year results of FY2022-23 ended March 31. The company noted that its net income attributable to common shareholders in Q4 FY2023 was $156 million, down by 27 per cent from $215 million a year ago. In the full fiscal year, the income amounted to $658 million, reflecting a Y-o-Y plunge of 31 per cent from $954 million.

Novelis’ net income from continuing operations in Q4 FY23 also stood at $156 million, reflecting a fall of 28 per cent Y-o-Y from $217 million. In the full year, the company earned $659 million as net income from continuing operations compared to $1,018 million in FY2022.

Adjusted EBITDA was recorded at $403 million in Q4 FY2023, down by 6.50 per cent from $431 in Q4 FY2022. Annual Adjusted EBITDA stood at $1,811 million compared to $2,045 million a year ago.

The downfall in financial results in Q4 could be attributed to a 9 per cent decline in net sales from $4,849 million to $4,397 million, driven by lower average aluminium prices. A 5 per cent decrease in flat rolled aluminium products shipments to 936,000 tonnes at the end of the quarter was also responsible for the financial fall. However, this was partially offset by increased product pricing and favourable product mix, resulting in an 8.82 per cent rise in full-year net sales from $17 billion to $18.5 billion. But shipments of aluminium flat-rolled products decreased by 2 per cent year-on-year through FY2023, standing at 3,790 tonnes.

Novelis posted its cash and cash equivalents at the end of the year were $1,498 million, up by 40 per cent from $1,070 million. The company’s liabilities and shareholder’s equity dropped from $15,096 million to $14,364 million.

Net debt at the end of the year was $4,142 million, down by 6.96 per cent from $4,452 million.

Dev Ahuja, Executive Vice President and CFO of Novelis Inc., said: "While our results continue to be muted by near-term challenges, we have demonstrated that our business is resilient, with fourth quarter Adjusted EBITDA per ton improving significantly on a sequential basis compared to the third quarter and very strong free cash flow generation even as we increase capital investments for future growth. We are well positioned to navigate current market headwinds and will continue to maintain a disciplined approach to managing cash efficiently as we embark on our next phase of transformational growth.”

Steve Fisher, President and CEO of Novelis Inc., said: "Novelis continues to deliver solid performance in a challenging environment, enabled by our diversified product mix, operational efficiencies and financial discipline. While macroeconomic headwinds are muting near-term performance, we believe these are transitory and that the longterm market outlook for our business remains robust. With our market-leading position and strong balance sheet, we remain committed to our transformational organic growth plan to further our position as a leading global provider of low-carbon, sustainable aluminum solutions.”