Hindalco Industries' wholly owned subsidiary, Novelis Inc, reported a net income attributable to its common shareholder of $237 million during Q2 September 2021 as compared to a net loss of $37 million in the prior year period.
Novelis Inc., a manufacturer of aluminum rolling and recycling, registered a net income from continuing operations of $239 million as against $144 million in the prior year. Excluding special items in both years, second quarter fiscal year 2022 net income from continuing operations jumped 54% to $244 million, driven mainly by higher EBITDA.
Net sales soared 38% to $4.10 billion for the second quarter of fiscal year 2022 over $3 billion in the prior year period, primarily driven by a 5% increase in shipments and higher average aluminum prices. Total flat rolled product shipments grew almost 5% to 968 kilotonnes in the second quarter of fiscal year 2022 compared to 923 kilotonnes in the prior year period, mainly as a result of strong demand for sustainable aluminum beverage packaging and specialty products, partially offset by lower automotive shipments due to the global semiconductor chip shortage impacting the automotive industry.
Adjusted EBITDA surged 22% to $553 million during Q2 FY22 as compared to $455 million in Q2 FY21. The increase in adjusted EBITDA was primarily due to higher volume and favorable metal benefits, partially offset by inflationary cost pressures. Novelis achieved a record adjusted EBITDA per ton shipped of $571 in the second quarter of fiscal year 2022 as compared to $493 in the prior year.
Novelis has recently announced plans to invest approximately $500 million in growth capital projects, including a $375 million investment to expand its rolling and recycling capabilities in Zhenjiang, China, and a $130 million investment at its Oswego plant in the US to increase hot mill capacity and enhance automotive sheet finishing capabilities. Fiscal year-to-date free cash flow from continuing operations was at $158 million compared to the prior year period $169 million. The primary driver for this reduction versus the prior year was higher working capital requirements due mainly to rising aluminum prices, mostly offset by higher Adjusted EBITDA and favorable metal price lag.
The company's net leverage ratio (net debt / TTM Adjusted EBITDA) further improved to 2.4x at the end of the second quarter of fiscal year 2022 as compared to 3.7x in the prior year period. The company continues to maintain a strong total liquidity position of $2.1 billion as of 30 September 2021.
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On a consolidated basis, Hindalco Industries reported a net profit of Rs 2,787 crore in Q1 FY22 as against a net loss of Rs 709 crore in Q1 FY21. Net sales rose 63.6% Y-o-Y to Rs 41,358 crore during the quarter.
Shares of Hindalco Industries declined 2.01% to Rs 463.45 on BSE. Hindalco Industries, the metals flagship company of the Aditya Birla Group, is the world's largest aluminium rolling and recycling company, and a major copper player. It is also one of Asia's largest producers of primary aluminium.
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