Novelis Reports Q3 Fiscal Year 2025 Results Amid Rising Scrap Aluminum Costs
Novelis, a global leader in sustainable aluminum solutions, reported its third quarter fiscal year 2025 results, reflecting financial pressures from rising scrap aluminum prices despite steady demand for its products. Net income attributable to the common shareholder decreased 9% year-over-year to $110 million, while net income excluding special items fell 32% to $119 million. Adjusted EBITDA declined 19% to $367 million, with rolled product shipments down 1% to 904 kilotonnes.
“We continue to see strong demand across our markets as customers increasingly seek lower-carbon, higher-recycled-content aluminum solutions,” said Steve Fisher, president and CEO of Novelis. “However, intensified competition for scrap aluminum is impacting our financial results. We are implementing operational and cost efficiency initiatives to mitigate these pressures and developing new technologies to expand our scrap input capabilities.”
Net sales for Q3 FY2025 increased 4% year-over-year to $4.1 billion, driven by higher average aluminum prices, while strong beverage packaging demand was offset by lower automotive and specialty shipments. Adjusted EBITDA per tonne shipped fell 19% to $406 due to unfavorable product mix and elevated scrap prices.
For the first nine months of FY2025, net cash flow from operating activities totaled $263 million, down from $420 million in the prior year, reflecting lower net income and unfavorable working capital changes. Adjusted free cash flow saw an outflow of $915 million, up from $517 million in the previous year, due to higher capital expenditures and reduced operating cash flow. Total capital expenditures rose 22% to $1.2 billion, primarily for new rolling and recycling capacity projects, notably in Bay Minette, U.S.
“Novelis is leading the industry in first-mover investments to capture growing market opportunities,” said Devinder Ahuja, executive vice president and CFO. “We plan to fund these investments through internally generated cash flow while maintaining balance sheet discipline to keep our net leverage ratio around 3.5x during this strategic investment cycle.”
As of December 31, 2024, Novelis had a total liquidity position of $1.6 billion, including $791 million in cash and cash equivalents and $790 million in available credit. In January 2025, the company issued $750 million in senior unsecured notes due January 2030, using the proceeds to repay borrowings under its ABL revolver.
