Hindalco arm Novelis reports 36% on yr fall in Apr-Jun net income at $96 mln
This story was originally published at 16:48 IST on 11 August 2025
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--Hindalco arm Novelis Apr-Jun consol net income $96 mln vs $151 mln yr ago
--Hindalco arm Novelis Apr-Jun consol net sales $4.72 bln vs $4.19 bln yr ago
--Hindalco arm Novelis Apr-Jun adjusted EBITDA $416 mln vs $500 mln year ago
--Hindalco arm Novelis Apr-Jun adjusted EBITDA/tn $432 vs $525 year ago
--Hindalco arm Novelis: Q1 rolled product shipments 963 kilo tn, up 1% on yr
--Novelis: Higher scrap prices negatively impacted Q1 financial performance
--Novelis: Making solid progress on comprehensive cost reduction program
--Novelis: Expect cost reduction program to lower cost base, improve margins
--Novelis: Expect run-rate cost savings over $100 mln by the end of FY26
--Novelis: Apr-Jun capex $386 mln
By Avishek Rakshit
KOLKATA – Novelis Inc., the subsidiary of Hindalco Industries Ltd., Monday reported a 36% year-on-year decline in its net income for the June quarter at $96 million, mainly on account of higher input costs of scrap metals – a key ingredient in the company's aluminium rolling products. Net sales increased by 16% on year to $4.7 billion on account of higher sales volume.
In a statement, the Aditya Birla group company said that the decline in the company's net income was primarily driven by restructuring charges and lower operating performance, which was partially offset by favourable metal price lag.
Net income attributable to the common shareholder, excluding special items, fell 43% on year to $116 million and adjusted earnings before interest, tax, depreciation, and amortisation declined 17% on year to $416 million in the June quarter. These decreases were primarily driven by higher aluminium scrap prices, unfavourable product mix, and a net negative tariff impact, partially offset by higher product pricing and favourable foreign exchange, among others. Adjusted EBITDA per tonne of sales was down 18% on-year to $432 in the June quarter from $525 a tonne.
The improvement in net sales was mainly driven by higher average aluminium prices and a 1% on-year increase in total rolled product shipments compared to the previous year period to 963 kilo tonnes. Higher beverage packaging shipments were partially offset by lower automotive and speciality shipments.
"We continue to see strong demand for aluminium beverage packaging sheet supporting top-line growth and the need for new capacity under construction at our plant in Bay Minette, Alabama," Steve Fisher, president and chief executive officer of Novelis, said in a statement.
"While market headwinds mainly from structurally higher scrap prices negatively impacted financial performance in the quarter, we are making solid progress on our comprehensive cost reduction program, which we expect will lower our cost base and improve our margins," Fischer said.
The company has already implemented a round of organisational redesign, footprint rationalisation and process improvement actions to drive simplification and efficiencies. "We believe these actions will accelerate anticipated run-rate cost savings to over $100 million by the end of this fiscal year, exceeding our previously estimated target of approximately $75 million," Fischer said.
The company's net cash flow provided by operating activities increased 42% on-year to $105 million in the first three months of the current financial year, primarily due to lower net working capital. However, it was partially offset by lower adjusted EBITDA.
Adjusted free cash flow saw an outflow of $295 million in Apr-Jun compared to an outflow of $280 million a year ago, with higher capital expenditures partially offset by higher net cash flow provided by operating activities, the statement said.
During the period under review, the company's total capital expenditure was $386 million, primarily attributed to strategic investments in new rolling and recycling capacity under construction, most notably in the US for the company's new greenfield rolling and recycling plant at Bay Minette in Alabama.
On Monday, shares of Hindalco closed almost flat at INR 672.85 on the National Stock Exchange. End
US$1 = INR 87.66
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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