Novelis’ year-end financial report shared lower sales, but higher earnings in the fourth quarter. | Ji Jinn/Shutterstock
Novelis, the largest consumer of used beverage cans in the U.S., recycled more than 82 billion aluminum cans during the 12 months ending March 31, and that recycled material significantly benefited the company financially towards the end of the year.
That was one takeaway from the global aluminum giant’s latest fiscal year-end report, which was published this month. For the full year, Novelis reported sales decreased by 12% from the prior year to hit $16.2 billion, a drop the company largely attributed to lower beverage packaging demand.
But in the fourth quarter, although the company reported sales were down 7% year over year, it saw product shipments increase due to rising beverage packaging demand. And the company reported earnings increased a substantial 28% year over year, reaching $514 million for the quarter.
“This significant improvement was primarily driven by favorable metal benefit from recycling and lower operating costs than the prior year period,” the company wrote. This benefit comes from the spread between the price for recycled aluminum and primary aluminum, among other factors. Indeed, primary aluminum prices on the London Metal Exchange have been on the rise in 2024, while UBC pricing remained constant in the early part of the year, according to RecyclingMarkets.net data.
The company reported increasing the recycled content in its end products to an average of 63% during the latest fiscal year, representing significant growth over the past decade-plus: In 2011, average recycled content totaled 33%. Overall, Novelis purchased 5.1 billion pounds of recycled aluminum during the latest fiscal year.
Novelis recycles both post-consumer and post-industrial aluminum. In North America the company operates 16 aluminum facilities, six of which have recycling operations. Most of its recycled feedstock comes from UBCs and automotive scrap metal. It is currently building a new facility with recycling capacity in Bay Minette, Alabama, totaling $4.1 billion and with a projected production capacity of 1.3 billion pounds per year. The company is also currently engaged in a $365 million recycling and casting capacity expansion at its Guthrie, Kentucky, facility.
In its annual report, Novelis commented on its advantaged position as brands increasingly look to provide recycled-content packaging.
“Growing awareness of environmentalism and demand for recyclable products, particularly increased consumer preference for more sustainable beverage packaging options, has increased the demand for aluminum rolled products,” the company noted. “Unlike other commonly recycled materials such as paper or PET plastic, aluminum can be infinitely recycled without affecting the quality of the product.”
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