Novelis reports weaker FY26 earnings after Oswego fires disrupt production and shipments

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Novelis reported lower earnings for the fourth quarter and full fiscal year 2026 after production disruptions caused by two fires at its Oswego, New York facility significantly affected shipments and profitability.

The company posted a net loss attributable to shareholders of USD 84 million in the fourth quarter, compared with net income of USD 294 million in the same period last year. Excluding special items, quarterly net income stood at USD 227 million, down 13 per cent year-on-year.

For the full fiscal year, Novelis reported net income attributable to shareholders of USD 15 million, down 98 per cent from USD 683 million in fiscal 2025. Excluding special items, annual net income declined 38 per cent to USD 476 million.

The company said production interruptions at the Oswego plant reduced rolled product shipments by an estimated 145 kilotonnes during the year and negatively impacted Adjusted EBITDA by around USD 104 million. In addition, pre-tax losses related to the fires reached USD 925 million, net of insurance recoveries.

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Fourth-quarter rolled product shipments fell 12 per cent year-on-year to 844 kilotonnes, while full-year shipments declined 5 per cent to 3.557 million tonnes.

Adjusted EBITDA for the fourth quarter slipped 3 per cent to USD 459 million, while full-year Adjusted EBITDA declined 9 per cent to USD 1.645 billion. The company said tariffs had an estimated negative impact of USD 143 million during fiscal 2026.

Despite the weaker results, Novelis said commissioning work had begun at its new aluminium rolling and recycling facility in Bay Minette, Alabama, with the cold mill entering commissioning in March.

Steve Fisher said the company remained confident about long-term demand for low-carbon and high-recycled-content aluminium products while focusing on restarting operations at Oswego and ramping up the Bay Minette facility.

The company added that the Oswego hot mill is now expected to restart within the next few weeks, earlier than previously anticipated.

Novelis ended fiscal 2026 with a net leverage ratio of 4.1 times and total liquidity of USD 2.8 billion, including USD 1.3 billion in cash and cash equivalents.

Dev Ahuja said leverage pressure during the year was largely tied to the Oswego disruptions and ongoing capital expenditure linked to the Bay Minette project, but the company expects to return to positive free cash flow by the end of fiscal 2027. 

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