Novelis Q1 FY26 Net Income Falls 36% to $96 Mn; Revenue Up 13%

12 Aug 2025 , 11:40 AM

Novelis Inc reported a 36% year-on-year (YoY) drop in net income attributable to its common shareholder to $96 million for the first quarter of fiscal year 2026. Excluding special items, net income fell 43% YoY to $116 million.

Net sales rose 13% YoY to $4.7 billion. This is driven by higher average aluminium prices and a 1% increase in total rolled product shipments to 963 kilotonnes. Gains from beverage packaging shipments were partially offset by softer automotive and specialty volumes.

Adjusted EBITDA declined 17% YoY to $416 million. The company’s Adjusted EBITDA per tonne fell 18% to $432. The company attributed the decline to higher aluminium scrap costs, an unfavourable product mix, and a net negative tariff impact, partly offset by improved product pricing, lower selling, general and administrative (SG&A) expenses, and favourable foreign exchange movements.

Net cash flow from operating activities rose 42% YoY to $105 million. This is aided by reduced working capital needs. Adjusted free cash flow saw an outflow of $295 million. This is compared to $280 million in the prior-year quarter. This reflects higher capital expenditures of $386 million. The spending was primarily directed towards strategic capacity expansions, including the new greenfield rolling and recycling plant in Bay Minette, Alabama.

President and CEO Steve Fisher said the strong demand for aluminium beverage packaging sheet continues to drive top-line growth, underpinning the need for new capacity at Bay Minette. “We are making solid progress on our cost reduction programme, which is expected to deliver over $100 million in run-rate savings by year-end, exceeding our earlier target of $75 million,” he added.

CFO Dev Ahuja noted that Novelis is streamlining its cost structure to free up resources for investment in low-carbon, sustainable aluminium solutions.

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