Novelis Inc, the world’s largest aluminum recycler and a leading provider of sustainable aluminum solutions, has announced its financial results for the first quarter of fiscal year 2026. In the latest quarter, the company reported net sales of $4.7 billion, marking a 13% year-over-year increase. This growth was fueled by higher average aluminum prices and a 1% rise in total rolled product shipments to 963 kilotonnes. Notably, beverage packaging shipments recorded growth, although this was partially offset by softer demand in the automotive and specialty product segments.
Net income for the quarter came in at $96 million, representing a 36% decline compared to the same period last year. This drop was primarily attributed to restructuring costs and weaker operational performance. These headwinds were partly mitigated by the benefit of favorable metal price lag, which provided some cushion to earnings.
On an adjusted basis, net income was $116 million, down 43% year-over-year. Adjusted EBITDA totaled $416 million, a 17% decrease from the prior year period. The decline in EBITDA was driven by higher scrap costs, a less favorable product mix, and net tariff impacts. However, the company saw partial relief from improved pricing, reduced selling, general and administrative (SG&A) expenses, and favorable currency movements. Adjusted EBITDA per tonne fell 18% to $432.
Cash flow from operations stood at $105 million, a 42% improvement over the prior year period. This increase was largely the result of reduced working capital requirements, which provided a boost to operational cash generation despite lower earnings.
Adjusted free cash flow showed an outflow of $295 million, compared to an outflow of $280 million in the same period last year. The higher cash outflow reflected increased capital investments, as the company continued to advance its long-term growth initiatives.
Capital expenditures during the quarter totaled $386 million. A significant portion of this spending was directed toward strategic expansion projects, most notably the Bay Minette, Alabama greenfield rolling and recycling plant. This project represents a key component of the company’s investment in expanding capacity and improving recycling capabilities.
As of June 30, 2025, the company’s net leverage ratio stood at 3.2x, with total liquidity of $3.0 billion. This liquidity included $1.1 billion in cash and $2.0 billion in committed credit availability, providing a solid financial foundation to support ongoing strategic investments and operational needs.
President and CEO Steve Fisher highlighted continued strong demand for aluminum beverage packaging sheet and emphasized progress at the Bay Minette facility. He noted that while higher scrap prices created headwinds, the company’s cost reduction program—which includes organizational streamlining, footprint optimization, and process improvements—is expected to deliver annualized savings exceeding $100 million by fiscal year-end, above the initial $75 million target.
CFO Dev Ahuja added that cost structure streamlining is enabling reinvestment into growth areas, particularly in low-carbon aluminum products. In June 2025, the company issued $400 million in tax-exempt bonds to partially finance the Bay Minette project.
Novelis serves customers across the aerospace, automotive, beverage packaging, and specialty markets in North America, Europe, Asia, and South America. In fiscal year 2025, the company reported net sales of $17.1 billion. Novelis is a wholly owned subsidiary of Hindalco Industries Limited, the metals flagship company of the Aditya Birla Group.
