Novelis Q3 Results: Profit Falls 9% Amidst Flood Impact, Higher Scrap Costs

Hindalco Industries' US subsidiary, Novelis Inc., reported a fall in net profit in its third quarter of the financial year 2025.

The American industrial aluminium company's net income fell 9% year on year to $110 million. The company's net income fell 32% on an annual basis if one excludes special items. The company recognised charges aggregating $5 million as special items during the third quarter due to the flooding caused by unprecedented heavy rainfalls, which hampered the company's plant located in Sierre, Switzerland.

The company expects capex during the financial year ending March 2025 to be on the low end of a range of $1.8 billion to $2.1 billion.

Note: -Novelis accounted for 61% of Hindalco's revenue and 56% of the company's Ebitda in FY24.

• Net sales are up 4% to $4.1 billion.

• Adjusted Ebitda down 19% to $367 million.

• Adjusted Ebitda per tonne down 19% to $406.

• Net income down 9% to $110 million.

• Net income excluding special items is down 32% to $119 million.

The company's uptick in net sales was driven by flat rolled product shipments of 904 kilotons, which were in line with the prior year, where shipments stood at 910 kilotons. The company noted that higher beverage packaging shipments continued due to strong demand, and the overall fall in shipments was due to speciality and automotive segments.

The company's 19% fall in its Ebitda per tonne to $406 was mainly due to significantly higher scrap prices and less favourable product mix. The company's $367 million adjusted Ebitda this quarter was in line with the levels indicated in the company's preliminary business update.

• Global beverage packaging demand remains strong.

• Weak macro environment for automotive in Europe, China seeing slower growth as well.

• North America shows favourable vehicle mix for automotive segment.

• Demand for new aircrafts remains strong with high order backlog.

• Expects seasonal demand uptick in specialty segment