ATLANTA, Aug. 7, 2017 /PRNewswire/ -- Novelis, the world leader in aluminum rolling and recycling, today reported net income of $101 million for the first quarter of fiscal year 2018, compared to net income of $24 million in the prior year period. Excluding tax-affected special items, the company reported net income of $103 million in the first quarter of fiscal 2018, up from $33 million reported in the first quarter of fiscal 2017. The year-over-year increase in net income is driven primarily by higher EBITDA and lower interest expense following debt refinancing actions in fiscal 2017.

"Our automotive strategy, enhanced operational performance and strong customer relationships resulted in record first quarter shipments while also increasing Adjusted EBITDA per ton," said Steve Fisher, President and Chief Executive Officer for Novelis. "Leveraging our unmatched global manufacturing footprint, innovative technology and closed-loop recycling systems, Novelis has become a preferred choice for automotive aluminum sheet. As more and more automakers turn to aluminum solutions to produce the next generation of vehicles, we are actively looking at opportunities to increase capacity to support our customers and reinforce our leadership position in this growing market."

Adjusted EBITDA, defined excluding metal price lag, increased eight percent to $289 million for the first quarter of fiscal 2018 from $268 million in the prior year period, primarily as a result of higher shipments, ongoing operational improvements, and favorable product mix, partially offset by pricing pressures in beverage can.

Net sales increased 16 percent to $2.7 billion for the first quarter of fiscal 2018. This was driven by a four percent increase in total shipments of flat rolled products to 785 kilotonnes, including a 16 percent increase in shipments of higher conversion premium automotive products, as well as higher average aluminum prices.

The company reported negative free cash flow of $77 million for the first quarter of fiscal 2018 as compared to negative $146 million in the prior year period. The $69 million improvement in free cash flow over the prior year was primarily a result of higher EBITDA and lower cash interest payments. Capital expenditures in the first quarter of fiscal 2018 were $39 million, $5 million lower than the prior year.

"Our continued strong financial performance in the first quarter, following a record year in fiscal 2017, provides a clear path to achieve another record year for Adjusted EBITDA and free cash flow in fiscal 2018," said Devinder Ahuja, Senior Vice President and Chief Financial Officer for Novelis.

As of June 30, 2017, the company reported a strong liquidity position of $1.2 billion.

Full Year Fiscal 2018 Guidance

With strong first quarter results and a positive market outlook, the Company expects fiscal 2018 Adjusted EBITDA to be between $1,100-$1,150 million for the full year. In addition, it expects fiscal 2018 free cash flow to be between $400-450 million.

First Quarter of Fiscal Year 2018 Earnings Conference Call

Novelis will discuss its first quarter of fiscal year 2018 results via a live webcast and conference call for investors at 9:00 a.m. ET on Monday, August 7, 2017. To view slides and listen only, visit the web at https://cc.callinfo.com/r/1vyk831lq8g4a&eom. To join by telephone, dial toll-free in North America at 800 761 0059, India toll-free at 18002660831 or the international toll line at +1 303 223 0117. Presentation materials and access information may also be found at novelis.com/investors.

About Novelis

Novelis Inc. is the global leader in aluminum rolled products and the world's largest recycler of aluminum. The company operates in 10 countries, has approximately 11,000 employees and reported $10 billion in revenue for its 2017 fiscal year. Novelis supplies premium aluminum sheet and foil products to transportation, packaging, construction, industrial and consumer electronics markets throughout North America, Europe, Asia and South America. Novelis is a subsidiary of Hindalco Industries Limited, an industry leader in aluminum and copper, and metals flagship company of the Aditya Birla Group, a multinational conglomerate based in Mumbai, India. For more information, visit novelis.com and follow us on Facebook at facebook.com/NovelisInc and Twitter at twitter.com/Novelis.

Non-GAAP Financial Measures

This press release and the presentation slides for the earnings call contain non-GAAP financial measures as defined by SEC rules. We believe these measures are helpful to investors in measuring our financial performance and liquidity and comparing our performance to our peers. However, our non-GAAP financial measures may not be comparable to similarly titled non-GAAP financial measures used by other companies. These non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for GAAP financial measures. To the extent we discuss any non-GAAP financial measures on the earnings call, a reconciliation of each measure to the most directly comparable GAAP measure will be available in the presentation slides filed as Exhibit 99.2 to our Current Report on Form 8-K furnished to the SEC concurrently with the issuance of this press release. In addition, the Form 8-K includes a more detailed description of each of these non-GAAP financial measures, together with a discussion of the usefulness and purpose of such measures.

Attached to this news release are tables showing the Condensed Consolidated Statements of Operations, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Cash Flows, Reconciliation to Adjusted EBITDA, Free Cash Flow, Reconciliation to Liquidity, Reconciliation to Net Income excluding Certain Items, and Segment Information.

Forward-Looking Statements

Statements made in this news release which describe Novelis' intentions, expectations, beliefs or predictions may be forward-looking statements within the meaning of securities laws. Forward-looking statements include statements preceded by, followed by, or including the words "believes," "expects," "anticipates," "plans," "estimates," "projects," "forecasts," or similar expressions. Examples of forward looking statements in this news release are statements about the company's ability to achieve stronger full year Adjusted EBITDA and free cash flow for fiscal 2018. Novelis cautions that, by their nature, forward-looking statements involve risk and uncertainty and Novelis' actual results could differ materially from those expressed or implied in such statements. We do not intend, and we disclaim any obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise. Factors that could cause actual results or outcomes to differ from the results expressed or implied by forward-looking statements include, among other things: changes in the prices and availability of aluminum (or premiums associated with such prices) or other materials and raw materials we use; the capacity and effectiveness of our hedging activities; relationships with, and financial and operating conditions of, our customers, suppliers and other stakeholders; fluctuations in the supply of, and prices for, energy in the areas in which we maintain production facilities; our ability to access financing for future capital requirements; changes in the relative values of various currencies and the effectiveness of our currency hedging activities; factors affecting our operations, such as litigation, environmental remediation and clean-up costs, labor relations and negotiations, breakdown of equipment and other events; the impact of restructuring efforts in the future; economic, regulatory and political factors within the countries in which we operate or sell our products, including changes in duties or tariffs; competition from other aluminum rolled products producers as well as from substitute materials such as steel, glass, plastic and composite materials; changes in general economic conditions including deterioration in the global economy, particularly sectors in which our customers operate; cyclical demand and pricing within the principal markets for our products as well as seasonality in certain of our customers' industries; changes in government regulations, particularly those affecting taxes, derivative instruments, environmental, health or safety compliance; changes in interest rates that have the effect of increasing the amounts we pay under our credit facilities and other financing agreements; the effect of taxes and changes in tax rates; and our ability to generate cash. The above list of factors is not exhaustive. Other important risk factors included under the caption "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017 are specifically incorporated by reference into this news release.

SOURCE Novelis Inc.