Cleveland’s rolled aluminium firm Aleris Corporation released first-quarter numbers yesterday. Though most figures remained steady compared to last year’s first quarter, start-up costs and losses on investments took its toll on the firm’s net profits in the quarter.
The firm shipped 199 thousand metric tons in the quarter, down slightly from last year’s first-quarter total of 205 thousand metric tons. Revenue in the quarter came to US$674 million, a shade above last year’s Q1 total of US$662 million. The firm’s commercial margin for Q1 was US$294 million, nearly identical to last year’s first-quarter commercial margin of US$293 million. Segment income for the quarter rose year-on-year, from last year’s first-quarter total of US$58 million to US$64 million in the just-ended quarter.
Aleris posted a net loss of US$35 million, down from the previous first-quarter’s net loss of US$6 million. Adjusted EBITDA for the quarter totaled US$52 million, better year-on-year from last year’s Q1 EBITDA of US$45 million. The firm said improved operating performance, favorable metal spreads from rising aluminium prices, and currency movements buoyed adjusted EBITDA. However, a US$17 million dip in unrealized derivative gains and losses, a US$9 million increase in interest expense from a recently-negotiated indebtedness, and US$8 million in start-up costs at the Lewisport, Kentucky automotive ABS project proved to be millstones that drug net profits further into the red.
“Improving operational performance globally and healthy demand in the North American building and construction industry led to solid year-over-year performance improvement in the first quarter, despite some demand softness in aerospace and weaker than normal first quarter automotive volumes,” explained Aleris’ chairman and CEO Sean Stack. “Our continued focus on operational excellence is delivering results, allowing us to better serve customers and strengthening our position as we head into the final stages of ramping up our new automotive capabilities in Lewisport, Kentucky.”
“As we look to the second quarter, we expect to benefit from the continued strength in building and construction in the U.S. as well as favorable aluminum prices,” continued Stack. “Aerospace inventory destocking will continue to impact demand in the short term, but we remain confident we are positioned to meet the long-term trends for aluminum in the industry.”
Aleris updated shareholders regarding the potential buy-out by Zhongwang USA LLC, revealing that the merger was taken off the table in February due to concerns voiced by the Committee on Foreign Investment in the United States (CFIUS). The company went on to say that it intends to re-file with the CFIUS and potentially close the deal by the end of next month.