Novelis Q3 Results: Net income down 9% YoY to $110 million, sales rise 4%

Novelis Inc, the wholly-owned subsidiary of Hindalco Industries, has reported a 9% year-on-year fall in its net income for the December quarter at $110 million. Excluding special items, the bottomline was 32% lower compared to the previous year at $119 million.

The US-based aluminium-maker’s net sales were 4% higher compared to the previous year at $4.1 billion, largely helped by higher average prices of aluminium, as shipments were at similar levels for both the years at 904,000 tonnes.

“Continued strong demand for beverage packaging sheet was offset by lower automotive and specialty shipments,” the company said in a statement.


Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) fell 19% on year to $367 million, while the adjusted EBITDA made on each tonne of steel stood at $406, also down by 19% on year.

“…competition for scrap aluminum has intensified and is creating significant pressure on scrap pricing, which is impacting our financial results,” Steve Fisher, chief executive officer of Novelis Inc was quoted in a release.

“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,” he said.

Novelis spent $1.2 billion on capital expenditure in the nine months of the current fiscal so far, up 22% compared to the previous year. This included strategic investments in new rolling and recycling capacity under construction.

The company announced its earnings after market hours in India, and shares of Hindalco Industries ended down 2% at 596.00 rupees on the NSE. Hindalco Industries will announce its earnings later this week.