Aleris Shows Net Loss in 2016, but Plans on Better Bottom Line in 2017
05 March 2017 by Staff
Cleveland’s rolled aluminium firm Aleris released results for the fourth quarter and full year of 2016 on Friday.
The firm turned in a net loss of US$35 million in the fourth quarter, a drop year-on-year from 2015’s fourth-quarter loss of US$13 million. Adjusted EBITDA for the quarter totaled US$43 million, an improvement year-on-year from 2015, when it totaled US$39 million. Aleris chalks up stronger building and construction demand and stable worldwide automotive production as factors working in its favor in the quarter. However, weaker distribution demand and a drop in demand from aerospace tended to drag down numbers in the quarter, they say.
Aleris reported a net loss of US$76 million for the year, a reversal in 2015’s net profit of US$49 million the year prior. Adjusted EBITDA totaled US$205 million in 2016, which was off from last year’s number of US$223 million. Worldwide aerospace demand for the year grew 8%, and global automotive demand rose 7% in 2016, which the company credits in helping buoy the year’s numbers. A loss of US$17 million from “challenging metal spreads” and a US$5 million hit from foreign currency tended to weigh down numbers for the year.
“Our solid fourth quarter performance across all regions, combined with the significant progress we’ve made on our strategic growth initiatives, gives us momentum in 2017,” said Aleris Chairman and CEO Sean Stack. “Our China facility doubled its aerospace volumes over the past year and contributed positively to our results while our Lewisport automotive expansion is on track to hit key milestones and begin serving customers later this year. We are also encouraged by additional volume from our global aerospace customers that will provide a strong base for long-term growth.”
Aleris projects numbers for the current quarter to be similar or slightly above those of the corresponding quarter last year. The firm expects a lower volume and less value-add products to be sold in the quarter. However, it sees favorable trends in scrap aluminium as the price of aluminium rises.
The firm expects its purchase by Zhongwang USA to be completed by the end of this month.