Aluminium Price Lag Tempers Aleris’ Bottom-Line Losses In Third Quarter
08 November 2018 by Staff
Cleveland rolled aluminium firm Aleris International, Inc. released results for the third quarter of 2018 yesterday. Numbers were up across the board thanks in large part to a jump in shipments and a favorable metal spread in the quarter.
In the just-ended quarter the firm shipped 225 thousand metric tons of product, up on the year from last year’s third-quarter total of 198 thousand metric tons. Revenue for the quarter totaled US$911 million, a rise on the year from last year’s revenue of US$713 million. Adjusted EBITDA in the third quarter figured at US$77 million, well above last year’s Q3 total of US$46 million and bolstered by improved rolling margins and favorable metal spreads.
Third quarter net loss came in at US$26 million, an improvement over last year’s penultimate quarter loss of US$66 million. Boosting the firm’s net loss up from the depths was a US$13 million drop in start-up costs thanks to the conclusion of the start-up phase at North America ABS Project and a US$5-million variation of favorable metal price lag.
For the first nine months of 2018, Aleris shipped 670 thousand metric tons of product, up from 616 thousand metric tons in the previous year’s initial nine months. Revenue for the period totaled US$2,644 million, an increase over the same period last year, when revenue totaled US$2,163 million. Adjusted EBITDA for the opening nine months of the year totaled US$215 million, an increase over last year’s nine-month total of US$164 million. Aleris’ net loss in the first three quarters of 2018 totaled US$68 million, up from last year’s nine-month loss of US$103 million.
Sean Stack, Aleris Chairman & CEO, credited a spike in automotive volumes and aerospace demand as propelling the firm’s financials higher in the quarter.
“Our dual focus on strengthening operational performance while executing our growth strategy led to a strong third quarter, as we achieved record automotive volumes and saw a sharp improvement in aerospace demand. With our Lewisport, Kentucky automotive facility now delivering products to customers, and deliveries under our long-term aerospace agreements, we expect these trends to continue and look forward to a strong finish to 2018.”
Going forward, Aleris expects the firm’s adjusted EBITDA and segment income in Q4 to be lower than that of Q3, but higher on the year. Shipments to North American automotive manufacturers are projected to rise, with volumes of aerospace and automotive to rise thanks to increased aircraft production rates and new model launches, receptively.
Ranked by Forbes as one of the United States’ largest privately-held companies, Aleris is a global leader in aluminum rolled products serving diverse industries including aerospace, automotive, building and construction, commercial transportation and industrial manufacturing. Headquartered in Cleveland, Ohio, Aleris operates production facilities in North America, Europe and Asia.