Novelis Inc., the international arm of Hindalco Industries Limited and the world leader in aluminium rolling and recycling, has announced its third-quarter results demonstrating a further downfall in financial performance. According to Steve Fisher, president and CEO of Novelis Inc., the increased competition in the scrap aluminium industry, with many more players joining, is creating significant pressure on pricing and eventually impacting their financial results.
According to the Q3 report, Novelis' net income stood at $110 million, further down by 14 per cent from $128 million in the previous quarter and 9 per cent lower than $121 million during the corresponding period of the last year. Net income attributable to common shareholders, excluding special items, was $119 million versus $157 million in Q2 FY2024-25 and $174 million in Q3 FY2023-24.
Adjusted EBITDA was $367 million, reflecting a Q-o-Q decline of 20.6 per cent from $462 million and a Y-o-Y fall of 19.2 per cent from $454 million. Adjusted EBITDA per tonne shipped was $406 million compared to $499 million a year ago.
Steve Fisher, president and CEO of Novelis Inc., said: "We continue to see strong demand across our markets as customers increasingly ask for lower-carbon, higher-recycled-content aluminium solutions as a way to reduce their carbon footprint. With a leading industry average of 63% recycled content in our products in our last fiscal year, Novelis has been a pioneer in using recycled inputs to drive down carbon emissions. As others have begun to follow suit, competition for scrap aluminium has intensified and is creating significant pressure on scrap pricing, which is impacting our financial results. We believe we are well-positioned to face these challenges and have operational and cost-efficiency initiatives underway to offset some of the pressures. At the same time, we are also developing new technologies that will allow us to expand the types of scrap inputs we can purchase for use in our system."
The company's final Q3 report also indicates a sluggish volume of rolled product shipments at 904,000 tonnes, down by 4.34 per cent Q-o-Q from 945,000 tonnes and 0.66 per cent lower Y-o-Y than 910,000 tonnes. However, the net sales value totalled higher than the previous year, amounting to $4.1 billion versus $3.9 billion, due to inflated average aluminium prices in Q3 FY2025. On a quarter-on-quarter basis, net sales were down by 4.65 per cent from $4.3 billion.
However, despite the back-to-back fall in shipments in Q2 and Q3 FY2025, Novelis has accomplished a higher volume of shipments through the first nine months of this year, totalling 2.8 million tonnes versus 2.722 million tonnes during the same period of the previous year. Net sales value through the nine months also totalled more than the previous year, at $12.562 billion versus $12.133 billion. But no recovery could be seen in the nine-month net income, which was pegged at $389 million compared to $434 million.
Net cash flow provided by operating activities was $263 million in the first nine months of FY2025 compared to $420 million in the prior fiscal year period, primarily due to lower net income and unfavourable changes in working capital.
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