Novelis (Novelis) Q2 2026 earnings summary

Executive summary

• Net income attributable to the common shareholder rose 27% year-over-year to $163 million, driven by favorable metal price lag, lower charges from the prior year's Sierre flood, and improved product pricing, despite operational disruptions from the Oswego fire and lower operating performance.

• Adjusted EBITDA declined 9% year-over-year to $422 million, reflecting higher tariffs and scrap prices, with per tonne EBITDA at $448, or $506 excluding tariffs.

• Net sales increased 10% year-over-year to $4.7 billion, mainly due to higher average aluminum prices and a 143% rise in local market premiums, with shipments stable at 941kt.

• The Oswego, NY plant fire in September 2025 caused operational disruption and $21 million in charges, but no injuries; hot mill restart is expected in December 2025.

• Progress continues on cost efficiency programs and strategic investments, including the Bay Minette, Alabama plant, with the 2025 Efficiency Plan targeting $300 million in annualized savings by FY28.

Financial highlights

• Net income for the quarter was $163 million, up from $128 million year-over-year; six-month net income was $259 million, down from $279 million.

• Adjusted EBITDA for the quarter was $422 million (down 9% year-over-year); for six months, $838 million (down 13%).

• Net sales for the quarter were $4.7 billion (up 10%); for six months, $9.5 billion (up 12%).

• Adjusted EBITDA per ton was $448; excluding tariffs, $506 per ton.

• Adjusted free cash flow was an outflow of $499 million for the first six months, mainly due to lower EBITDA and higher CapEx.

Outlook and guidance

• Oswego outage impact is expected to be temporary, with hot mill restart in December 2025 and most recovery in the next fiscal year.

• Tariff mitigation strategies are expected to reduce net tariff impact in coming quarters.

• Cost efficiency program now targets run rate savings above $125 million by year-end, with a long-term goal above $300 million by FY28.

• Full commissioning of Bay Minette plant expected in the second half of 2026, with cold mill commissioning next quarter.

• Capital expenditures for FY26 expected at $1.9–$2.2 billion, including $300 million for maintenance.