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Informist, Thursday, Jan. 9, 2025

 

MUMBAI – US-based Novelis Inc.'s adjusted earnings before interest, tax, depreciation, and amortisation for the December quarter is expected to fall to $360 million-$370 million from $454 million in the year-ago quarter, according to the company's preliminary financial results for the quarter. The company is a subsidiary of Hindalco Industries Ltd. and accounted for 62% of Hindalco's revenue and nearly 43% of Hindalco's operating profit for the September quarter.

 

An increase in scrap prices and an unfavourable product mix from lower automotive shipments weighed on the company's adjusted EBITDA for the December quarter. For Apr-Dec, the company is expected to report an adjusted EBITDA in the range of $1.32 billion-$1.33 billion, down from $1.36 billion a year ago, Novelis said in a filing made to the US Securities and Exchange Commission. 

 

While the company is expected to report a lower adjusted EBITDA from the year-ago quarter, it expects its shipments to remain almost flat from a year ago as lower automotive and speciality shipments were nearly offset by higher beverage packaging shipments. Novelis said its shipments for the reporting quarter will likely be in the range of 900 kilo tonnes-910 kilo tonnes compared with 910 kilo tonnes a year ago. However, the company said its shipments for Apr-Dec might increase from a year ago and would be in the range of 2,795 kilo tonnes-2,805 kilo tonnes. The company's shipments were 2,722 kilo tonnes in the year-ago period.

 

 

The $360 million-$370 million expected adjusted EBITDA is the lowest in eight quarters, according to the data from Hindalco's investor presentations. Besides the fall in the adjusted EBITDA, the aluminium company is expected to record higher cash outflows for Apr-Dec from a year ago, due to a rise in capital expenditure. Novelis' Apr-Dec adjusted free cash outflows will likely be in the range of $900 million-$950 million, up from $517 million in the year-ago period. 

 

Its capital expenditure has likely increased to $425 million-$475 million for the December quarter compared with $342 million a year ago, largely due to the capital outlay for the company's greenfield project in Alabama, Novelis said. For the nine months to December, the company's capital expenditure is expected to be $1.14 billion-$1.19 billion, up from $960 million a year ago. 

 

The company had reported revenues of $4.3 billion and an adjusted EBITDA of $462 million for the previous quarter. It recorded 945 kilo tonnes of shipments for the quarter ended September, according to Hindalco's Jul-Sept investor presentation.  

 

As of Dec. 31, the company had liquidity of $1.69 billion, which includes $792 million of cash and cash equivalents and $894 million available under its revolving credit facility and other committed credit facilities, Novelis said. The company's management said Novelis would likely post a better performance in the March quarter as it expects higher seasonal shipment volumes, a more favourable product mix and metal benefits. The company would also benefit from the new contract pricing, Novelis said.  

 

Hindalco Industries had reported a consolidated net profit of INR 39.09 billion for the September quarter on revenues of INR 582.03 billion. At 0915 IST, shares of the company traded at INR 583.90 on the National Stock Exchange, down 0.5%.  End

 

US$1 = INR 85.92

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Aman Aryan

Edited by Akul Nishant Akhoury

 

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