News ArticleNovelis Records $210 Million Net Income and $508 Million Adjusted EBITDA in Q2 FY27 Amid Bay Minette Plant Progress
Net income rises 29% YoY aided by insurance recoveries and favorable market, while Bay Minette cold mill starts production with commercial shipments planned for Q1 FY28
Novelis Inc., a wholly owned subsidiary of Hindalco Industries, reported a 29% year-on-year increase in net income to $210 million and a 20% rise in adjusted EBITDA to $508 million for Q2 FY27. Despite a slight 2% fall in rolled product shipments, the company saw higher aluminum prices and insurance recoveries related to 2025 Oswego fires. The Bay Minette cold mill began production, with commercial shipments expected in Q1 FY28, supporting North American market supply expansion.
Novelis Inc.
Investor Presentation
Novelis Inc., a wholly owned subsidiary of Hindalco Industries Limited, announced net income of $210 million for Q2 fiscal year 2027, a 29% increase year-over-year, driven by higher aluminum prices and insurance recoveries related to the 2025 Oswego fires. Adjusted EBITDA also rose 20% to $508 million, while rolled product shipments slightly declined by 2% to 919 kilotonnes. The Bay Minette cold mill produced its first coil in September, advancing towards commercial shipments expected in Q1 FY28.
Net sales for Q2 FY27 increased by 25% to $5.9 billion, mainly due to higher average aluminum prices, partially offset by a 2% decrease in rolled product shipments. The shipment decline was driven by lower automotive and specialty product shipments, despite higher beverage packaging and aerospace shipments.
Insurance recoveries related to the 2025 Oswego fires contributed $519 million cumulatively through the end of Q2, including $39 million in business interruption recoveries during the quarter, supporting net income growth.
Net cash used in operating activities was $418 million for the first six months of FY27 compared to a cash inflow of $411 million the previous year, affected by working capital changes and Oswego fire impacts. Adjusted free cash flow was an outflow of $1.8 billion, reflecting lower operating cash flow and capital expenditures for the Bay Minette greenfield rolling and recycling plant in Alabama.
The Bay Minette plant started coil production on its cold mill in September and aims to begin commercial shipments by Q1 FY28, enhancing Novelis's ability to serve the North American market amid supply demand dynamics.
At the end of Q2 FY27, Novelis's net leverage ratio was 4.7x, with total liquidity of $2.0 billion, composed of $1.3 billion in cash and $761 million available through credit facilities.
Highlights
- Net income attributable to common shareholders was $210 million, up 29% year-over-year.
- Adjusted EBITDA rose 20% to $508 million in Q2 FY27.
- Rolled product shipments decreased 2% to 919 kilotonnes in the quarter.
- Cumulative insurance recoveries related to 2025 Oswego fires totaled $519 million through Q2.
- Bay Minette cold mill began producing coil in September, with commercial shipments expected in Q1 FY28.
- Net cash used in operating activities was $418 million in the first half of FY27, reflecting working capital and fire impacts.
Key Data Snapshot
What happened
- Novelis reported a 29% increase in net income attributable to common shareholders to $210 million for Q2 FY27.
- Adjusted EBITDA increased 20% year-over-year to $508 million, supported by insurance recoveries and favorable metal benefits.
- Net sales rose 25% to $5.9 billion, driven by higher aluminum prices despite a 2% dip in rolled product shipments to 919 kilotonnes.
Key details
- Insurance recoveries totalled $519 million through end of Q2 related to the 2025 Oswego fires, including $39 million in business interruption insurance during the quarter.
- Adjusted EBITDA per tonne shipped improved 23% year-over-year to $553.
- Bay Minette cold mill produced its first coil in September and is progressing toward commercial shipments starting Q1 FY28.
- Net cash used in operations for the first half of FY27 was $418 million outflow, impacted by working capital changes and effects from the Oswego fires.
- Adjusted free cash flow outflow widened to $1.8 billion in the first six months due to lower operating cash flow and planned capital expenditures for Bay Minette plant expansion.
Operational performance
- Shipment volumes declined by 2% due to lower automotive and specialty products despite higher beverage packaging and aerospace shipments.
- Bay Minette plant marks a key operational milestone producing coil and enhancing capacity to supply North America.
Funding and capital details
- Net leverage ratio stood at 4.7x at the end of Q2 FY27.
- Company held $2.0 billion in total liquidity as of September 30, 2026, including $1.3 billion in cash and $761 million available under credit facilities.
- Capital expenditures increased related to the Bay Minette greenfield plant in Alabama.
Next milestones
- Bay Minette plant expected to commence commercial shipments in Q1 FY28.
- Management anticipates a return to positive free cash flow and initiation of deleveraging cycle toward the end of FY27.
Highlights
- Net income attributable to common shareholders was $210 million, up 29% year-over-year.
- Adjusted EBITDA rose 20% to $508 million in Q2 FY27.
- Rolled product shipments decreased 2% to 919 kilotonnes in the quarter.
- Cumulative insurance recoveries related to 2025 Oswego fires totaled $519 million through Q2.
- Bay Minette cold mill began producing coil in September, with commercial shipments expected in Q1 FY28.
- Net cash used in operating activities was $418 million in the first half of FY27, reflecting working capital and fire impacts.
Disclosures
- Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
- SEC non-GAAP financial measure regulations
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