On 4^th August 2021, the subsidiary of Aditya Birla Group’s Hindalco Industries’, Novelis Inc., the world leader in aluminium rolling and recycling, reported net income attributable to its common shareholder of $240 million in the Q1 FY2022 compared to a net loss of $79 million in the prior-year period.

However, net income from continuing operations increased to $303 million compared to a net loss of $61 million in the existing year, which had been negatively impacted by the COVID-19 pandemic and acquisition-related special items. Excluding special items in both years, Q1 FY 2022 net income from continuing operations of $260 million is up significantly compared to $22 million in the previous year, driven mainly by higher after-tax Adjusted EBITDA.

Novelis posted a rise in net sales by 59% to $3.9 billion for the Q1 FY 2022 compared to $2.4 billion in the prior-year period, primarily driven by a 26% increase in shipments, favourable product mix and higher average aluminium prices. Total flat-rolled product shipments increased to 973 kilotonnes in the Q1 FY 2022 compared to 774 kilotonnes in the prior-year period, mainly a result of strong demand across end markets in 2021, compared to a soft prior year shipment quarter impacted by temporary customer shutdowns due to the COVID-19 pandemic. Current year beverage packaging and speciality product shipments benefited from strong market demand, while automotive shipments are more than double the prior year despite some headwinds from the current semiconductor chip shortage impacting the automotive industry.

The American industrial aluminium company reported an adjusted EBITDA increase by 119% to $555 million in the Q1 FY 2022 compared to $253 million in the prior-year period. The surge in Adjusted EBITDA is primarily due to higher volume and favourable product mix, as well as metal benefits and a $47 million gain related to a favourable decision in Brazilian tax litigation, partially offset by higher costs resulting from higher production volume and inflationary cost pressures. Novelis achieved an Adjusted EBITDA per ton shipped of $570 in the first quarter of the fiscal year 2022, compared to $327 in the prior year and $514 in the fourth quarter of fiscal 2021. Excluding the non-recurring tax litigation benefit, Adjusted EBITDA per ton equates to $522 in the first quarter of the fiscal year 2022.

Steve Fisher, President and CEO, Novelis Inc., said: "Our strategy to grow a diverse portfolio of sustainable aluminium products utilizing our leading geographic footprint to meet strong demand has again delivered outstanding results in the quarter."

"With new automotive capacity in the US and China now ramping up and the financial fortitude to continue to invest in growth opportunities aligned with our long-term carbon neutrality goals, we will further expand our leading position in delivering low-carbon, sustainable aluminium solutions across premium end markets worldwide."

The company further reported free cash flow from continuing operations was an outflow of $30 million in the Q1 FY 2022, compared to the prior-year period outflow of $146 million. This improvement versus the prior year is driven primarily by higher Adjusted EBITDA and favourable metal price lag, largely offset by higher working capital requirements including rising aluminium prices. The aluminium company reached its targeted net leverage ratio (net debt / TTM Adjusted EBITDA) of 2.5x at the end of the first quarter of the fiscal year 2022, compared to 3.8x in the prior-year period after the close of the Aleris acquisition and 2.9x in the fourth quarter of the fiscal year 2021.

Devinder Ahuja, Senior Vice President and Chief Financial Officer, Novelis Inc., said: "Novelis has achieved a milestone $2 billion of Adjusted EBITDA on a trailing 12-month basis, driving rapid improvement in our net leverage ratio and providing significant financial flexibility to grow the business within our capital allocation framework."

As of 30^th June 2021, the company pursues to sustain a strong total liquidity position of $2.3 billion.