Hindalco Industries estimated a negative free cash flow impact of $550-650 million due to the fire at the Novelis plant in the United States on September 16. The company stated that the losses include an adjusted EBITDA impact of approximately $100-150 million.
Furthermore, the Aditya Birla Group company said that Novelis may also incur an additional cost of $21 million in the related charges in restoring the operations at the plant. This is in addition to a significant impact on the revenue.
Hindalco stated that the insurance companies would cover 70 -80 per cent of the losses or damage caused by the fire at the Oswego, New York, facility.
When will operations resume at New York facility
Earlier last quarter, a fire broke out at Novelis’ plant in Oswego, New York. Although there were no casualties due to the accident, it caused major production disruption at the plant, especially in the hot mill area.
In a statement, Hindalco said that it expects to restart the hot mill in December this year. “Despite this unexpected challenge, we remain confident in the strength of our business, the resilience of our team, and our ability to adapt and recover.” Steve Fisher, President and CEO of Novelis Inc said in a statement.
Novelis Q2 FY26 results
In an exchange filing, Hindalco Industries said that Novelis’ Q2 FY26 net sales increased 10 per cent YoY to $4.7 billion. Further, Novelis’ adjusted EBITDA decreased 9 per cent to $422 million in Q2 FY26 .
The company said that the EBITDA decline in the second quarter was primarily driven by a net negative tariff impact and higher aluminium scrap prices, partially offset by higher product pricing and cost efficiency actions