Aluminium rolling and recycling giant Novelis has reported its fourth quarter and full fiscal year 2026 financial results, revealing a challenging year heavily impacted by operational disruptions at its Oswego facility in New York.

Despite suffering significant net income declines due to consecutive plant fires, the company highlighted a resilient underlying business, improving EBITDA per tonne, and an accelerated timeline for restarting its critical Oswego hot mill.

Oswego Fires Take a Heavy Toll on Shipments and Profits

The fiscal year was severely disrupted by two separate fires at the Oswego plant—the first on September 16, and a subsequent fire on November 20 in an area where repair work was underway. While both incidents resulted in zero injuries and were contained strictly to the hot mill area, the financial and operational fallout was substantial:

• Shipment Volatility: Production interruptions cut fourth-quarter rolled product shipments by 12% year-over-year to 844 kilotonnes. Full-year shipments dropped 5% to 3,557 kilotonnes.
• Earnings Impact: The production gaps slashed fourth-quarter Adjusted EBITDA by an estimated $53 million, contributing to a total full-year hit of $104 million.
• Pre-Tax Losses: The company absorbed $630 million in pre-tax net losses in Q4 alone, totaling $925 million for the full fiscal year (net of insurance recoveries).

Consequently, Novelis reported a net loss of $84 million for the fourth quarter, compared to a net income of $294 million in the prior-year period. Full-year net income plummeted 98% to $15 million.

Underlying Resiliency and Rising Efficiencies

Despite the headline net income losses, Novelis demonstrated strong foundational health and commercial pricing power:

• Revenue Growth: Driven by higher average aluminium prices, fourth-quarter net sales rose 4% to $4.8 billion, while full-year net sales climbed 7% to $18.4 billion.
• Adjusted Performance: Excluding special items, Q4 net income stood at $227 million (down 13% YoY). Full-year Adjusted EBITDA reached $1.6 billion, down 9% due to the fires and $143 million in tariff headwinds, but mitigated by strong product pricing and lower SG&A costs.
• Per-Tonne Efficiency: Crucially for the metal packaging sector, Adjusted EBITDA per tonne shipped in Q4 rose 10% year-over-year to $544, showcasing strong operational discipline amidst supply constraints.

“We begin the new fiscal year energised by the strength of the underlying business and confident in our ability to capture strong market demand for high-recycled-content, low carbon aluminium,” said Steve Fisher, President and CEO of Novelis.

Strategic Outlook: Bay Minette and Oswego Restart

The road ahead looks increasingly positive for the aluminium packaging supply chain. Fisher confirmed that the Oswego hot mill is on track to safely restart “within the next few weeks,” well ahead of the company’s original late-June estimate. This will allow Novelis to rapidly fulfill pent-up customer demand.

Concurrently, Novelis is pressing ahead with its major North American growth strategy. Capital expenditures rose 39% to $2.3 billion in fiscal 2026, primarily directed toward its highly anticipated greenfield rolling and recycling plant in Bay Minette, Alabama. The site reached a major milestone by beginning cold mill commissioning in March and remains on schedule to fully commission in the second half of this calendar year.

Financial Health and Deleveraging

The intensive capital expenditure on Bay Minette combined with the Oswego operational pauses naturally constrained short-term cash flow. Net cash used in operating activities saw an outflow of $193 million for the year, while net leverage ratio rose to 4.1x. Total liquidity remains robust at $2.8 billion.

Dev Ahuja, Executive Vice President and CFO, reassured the market that this pressure is temporary:

“With Oswego restarting, Bay Minette nearing completion, and continued strong business momentum, we believe we have a clear line of sight to returning to positive free cash flow by the end of fiscal 2027, setting a firm path towards deleveraging.”