Novelis Reports Q4 Net Loss of $84 Million
Novelis Inc. reported a Q4 net loss of $84 million, down from a net income of $294 million in the prior year, due to $630 million in pre-tax losses from fires at its Oswego plant. Net sales rose 4% to $4.8 billion, while Adjusted EBITDA fell 3% to $459 million. For the full fiscal year, net income dropped 98% to $15 million.
*this image is generated using AI for illustrative purposes only.
Hindalco Industries Limited announced that its wholly owned subsidiary, Novelis Inc., has released its financial results for the fourth quarter and full fiscal year ended March 31, 2026. The company reported a net loss attributable to common shareholders of $84 million for the quarter, compared to a net income of $294 million in the prior year. This decline was primarily driven by pre-tax losses of $630 million related to fires at its Oswego, New York, plant in September and November 2025. Excluding special items, net income was $227 million, down 13% year-over-year.
Financial Performance
Net sales for the quarter increased 4% versus the prior year to $4.8 billion, driven by higher average aluminum prices, partially offset by a 12% decrease in rolled product shipments to 844 kilotonnes. Adjusted EBITDA decreased 3% year-over-year to $459 million, impacted by an estimated negative $53 million from production interruptions at Oswego and a net negative tariff impact. Adjusted EBITDA per tonne shipped rose 10% to $544.
For the full fiscal year 2026, net sales increased 7% to $18.4 billion. Net income attributable to common shareholders decreased 98% to $15 million, while Adjusted EBITDA fell 9% to $1.6 billion. The company cited an estimated negative $104 million impact from the Oswego fires and $143 million from tariffs as key factors affecting profitability.
| Metric | Q4 FY26 | Q4 FY25 | FY26 | FY25 |
|---|---|---|---|---|
| Net Sales ($ million) | 4,787 | 4,587 | 18,434 | 17,149 |
| Net (Loss) Income ($ million) | (84) | 294 | 15 | 683 |
| Adjusted EBITDA ($ million) | 459 | 473 | 1,645 | 1,802 |
| Rolled Product Shipments (kt) | 844 | 957 | 3,557 | 3,757 |
Operational Updates
The Oswego plant fires caused rolled product shipments to be approximately 73 kilotonnes lower than expected in Q4 and 145 kilotonnes lower for the full year. Recovery efforts are progressing, with the hot mill expected to restart in the next few weeks, ahead of the previous estimate of the end of June. Meanwhile, the cold mill at the new U.S. greenfield plant in Bay Minette, Alabama, began commissioning in March, with full plant commissioning expected in the second half of calendar year 2026.
Liquidity and Outlook
Net cash used in operating activities was an outflow of $193 million in fiscal year 2026, and adjusted free cash flow was an outflow of $2.4 billion. The company reported total liquidity of $2.8 billion as of March 31, 2026. Management expects to return to positive free cash flow by the end of fiscal 2027 as the Oswego plant restarts and the Bay Minette project nears completion.
Source: None/Company/INE038A01020/3c1f2d872720421e.pdf
Historical Stock Returns for Hindalco Industries
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.65% | +3.18% | +9.72% | +41.15% | +80.46% | +185.58% |
How will the full restart of the Oswego plant and the Bay Minette greenfield facility ramp-up collectively impact Novelis's shipment volumes and EBITDA margins in fiscal year 2027?
Given the $143 million tariff headwind in FY26, how might evolving U.S. trade policy on aluminum affect Novelis's competitive positioning and pricing strategy going forward?
With adjusted free cash flow at a negative $2.4 billion and a return to positive free cash flow targeted only by end of FY27, what are the implications for Hindalco's consolidated balance sheet and dividend policy in the near term?
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