Novelis reports EBITDA growth of 6% in Q3 FY 2019 on higher shipments, favorable product portfolio mix

Novelis Inc., the leader in aluminum rolling and recycling, today announced results for the third quarter of fiscal year 2019. The company reported net income of $78 million, compared to $121 million in the prior year period.

Excluding tax-effected special items, net income dropped to $101 million due to a $34 million non-cash income tax benefit in the prior year resulting from the U.S. Tax Cut and Jobs Act of 2017.

Adjusted EBITDA increased 6% YoY to $322 million. The increased EBITDA is attributed to the higher shipments, favorable product portfolio mix, favorable metal costs and other cost efficiencies.

Net sales increased 3% YoY to $3.0 billion, driven by higher total shipments and a more favorable product mix. Shipments of flat rolled products increased 1% to 800 thousand tons.

 “Continued customer demand from automakers and favorable market conditions in beverage can contributed to this quarter’s strong financial results,” said Steve Fisher, President and CEO, Novelis Inc. “Our proven operational performance and strategic growth initiatives have positioned the company to make our customers more successful today and well into the future.”

The company generated $23 million of free cash flow. Year-to-date free cash flow before capital expenditures improved $98 million over the prior year to $337 million, driven primarily by higher Adjusted EBITDA.

"With strong free cash flow generation, we are able to fund organic investments in order to supply customers for the long term,” said Devinder Ahuja, Senior Vice President and Chief Financial Officer, Novelis Inc. “Further, our diverse global footprint and product portfolio positions us to navigate near-term global economic uncertainties while maintaining our commitment to disciplined net leverage levels.”

The company’s liquidity position stands at US$1.7 billion as of December 31, 2018.