Novelis reports significant improvement in profitability
Novelis began fiscal 2027 with a significant improvement in profitability, reporting net income attributable to common shareholders of $164 million for the first quarter, up 71% from the same period a year earlier.
The stronger result was driven primarily by favourable metal price timing as aluminium prices increased. However, the benefit was partly offset by $265 million in pre-tax net losses associated with two fires at the company’s Oswego, New York, facility.
Novelis President and CEO Steve Fisher said the company had made a strong start to the new financial year, supported by operational improvements, favourable market conditions and continued demand for lower-carbon aluminium products.
The company is also benefiting from the restart of its Oswego hot mill, which returned to operation in early June. Production at the facility is now being increased progressively as Novelis works to meet accumulated customer demand and restore shipments to normal levels.
At the same time, Novelis has begun commissioning major equipment at its new Bay Minette facility in Alabama. The cold mill is scheduled to reach full production in the second half of 2026. Once the project is fully operational, the facility is expected to produce up to 600,000 tonnes of finished aluminium products annually.
Chief Financial Officer Dev Ahuja said the recovery of Oswego and the progress at Bay Minette have reinforced the company’s expectation of generating positive free cash flow in the fourth quarter of fiscal 2027.
Novelis expects continued cost controls, insurance recoveries and underlying business strength to support its financial position. As capital expenditure declines following the Bay Minette start-up, the company also expects to begin reducing its debt burden.
First-quarter net sales climbed 23% year over year to $5.8 billion, largely reflecting higher average aluminium prices. The increase was partly countered by a 5% decline in rolled-product shipments, which fell to 916,000 tonnes.
The lower shipment volume included an estimated 33,000-tonne reduction attributable to the disruption at Oswego following the fires during fiscal 2026.
Adjusted EBITDA rose 24% from the prior-year quarter to $516 million. The improvement reflected lower aluminium scrap costs and efficiency gains, although higher net tariff expenses provided a partial drag on earnings.
The Oswego disruption had an estimated $18 million positive effect on adjusted EBITDA during the quarter. Insurance proceeds received during the period more than offset the financial impact of lost production.
Excluding special items, net income attributable to common shareholders increased 128% year over year to $265 million, highlighting the underlying improvement in Novelis’ operating performance despite the ongoing effects of the Oswego incident.
