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Novelis Inc. Reports First Quarter Fiscal Year 2026 Results

On August 11, 2025, Novelis Inc., the world’s leading provider of sustainable aluminum solutions, released its financial results for the first quarter of its fiscal year 2026. This report reflects both positive strides in certain areas and significant challenges, particularly in relation to market pressures and higher operational costs.

Financial Highlights

The quarter brought in a total net income of $96 million, which represents a 36% decrease year-over-year. When excluding special items, the adjusted net income stood at $116 million, a more notable drop of 43% compared to the same period last year. Additionally, the Adjusted EBITDA decreased 17% year-over-year to $416 million, highlighting the tough market conditions that have influenced the company's performance.

The company reported rolled product shipments of 963 kilotonnes, marking a slight 1% increase from the previous year. This growth was primarily driven by strong demand for aluminum beverage packaging, even though lower automotive and specialty shipments impacted overall performance.

Market Dynamics

In a statement from CEO Steve Fisher, it was noted that despite facing challenges mainly due to structurally higher scrap prices, Novelis is optimistic about its demand in aluminum beverage packaging and is actively working on increasing new capacity at its facility in Bay Minette, Alabama. The price of scrap aluminum has imposed serious strains on financial returns, yet the company remains focused on implementing a comprehensive cost reduction program aimed at mitigating some of these impacts.

The CEO reiterated that initiatives like organizational redesign, footprint rationalization, and process improvements are underway to simplify operations and boost efficiencies. With these steps, Novelis is projecting to exceed its initial target of achieving over $75 million in cost savings by the close of this fiscal year, instead expecting more than $100 million.

Cash Flow and Investments

Despite lower Adjusted EBITDA figures, the cash flow from operating activities surged 42%, reaching $105 million in the first quarter. This was attributed to reduced working capital, even though it was offset by lower Adjusted EBITDA results. However, the Adjusted free cash flow reported an outflow of $295 million—a slight increase from the previous year’s outflow of $280 million—as capital expenditures climbed due to strategic investments in ongoing projects, including the Bay Minette plant.

Total capital expenditures for the first quarter amounted to $386 million, primarily tied to further development of the new rolling and recycling plants. The facility in Bay Minette is crucial for meeting growing market requirements for low-carbon and sustainable products—a core focus for Novelis moving forward.

Future Prospects

Executive Vice President and CFO Dev Ahuja commented on the ongoing efforts to refine the company's cost structure amid external pressures, revealing confidence that these strategies would provide avenues for investing in sustainable aluminum solutions. The firm reported $3.0 billion in total liquidity as of June 30, 2025, supported by $1.1 billion in cash reserves and $2.0 billion in credit facilities available for future growth.

Overall, Novelis Inc. stands at a crossroads of navigating through market adversities while positioning itself for future demand in sustainable aluminum production across multiple sectors, including aerospace and automotive industries. As they continue to adapt, the company remains committed to achieving a sustainable and circular economy through proactive innovation and partnerships with key stakeholders.

For more detailed insights, Novelis is scheduled to discuss its financial results and future plans via a live webcast and conference call for investors on August 11, 2025. Interested participants can join the call or watch the webcast for an in-depth analysis of the company’s performance and strategies.

For additional information on this financial report, visit Novelis Investors or review the disclosures that accompany the earnings call.