Kaiser Aluminum Reports Strong First-Quarter Numbers

California’s Kaiser Aluminum turned in strong first-quarter numbers this year according to results released yesterday.

The semi-fabricated aluminium firm finished the quarter with US$355 million in net sales, better than the previous quarter’s total of US$332 million, and better year-on-year than last year’s Q1 total of US$343 million. It turned in US$36 million in net income, also better quarter-on-quarter than the Q4 total of US$25 million, and better year-on-year than last year’s Q1 total of US$26 million.

Adjusted EBITDA ended the quarter at US$54 million, slightly above Q4’s number of US$52 million, and just off from last year’s Q1 total of US$55 million. Similarly, the EBITDA margin last quarter of 26.6% was slightly above Q4’s EBITDA margin of 25.8%, and nearly level with last year’s Q1 margin of 26.2%. Adjusted net income ended the quarter at US$27 million, better quarter-on-quarter than last quarter’s total of US$23 million, and a shade under last year’s initial quarter, when it totaled US$28 million.

Total shipments for the quarter were 164 million pounds, above Q4’s output of 152 million pounds, and above last year’s first-quarter shipment total of 159 million pounds.

“Overall, we achieved solid first quarter results,” explained Kaiser Aluminum’s Chairman and Chief Executive Officer Jack A. Hockema. “As we discussed during our February earnings call, market-driven headwinds from lower sales margins and commercial aerospace supply chain destocking, combined with internal headwinds related to planned construction-related inefficiencies at our Trentwood rolling mill, negatively impacted our first quarter results. Despite these headwinds, our first quarter 2017 adjusted EBITDA and adjusted EBITDA margin were comparable to the strong prior year period driven by solid operating performance and improved costs.”

Although Q1’s results were solid, Hockema expects a bump in the road for results in the current quarter due to certain internal challenges.

“Our outlook for the first half 2017 remains consistent with our comments on the February earnings release and conference call,” Hockema elaborated. “Market-driven headwinds are expected to be similar to the first quarter. Additionally, internal headwinds related to the Trentwood project will be a temporary but significant drag on second quarter results. The planned equipment outages and construction at Trentwood will result in reduced shipments, substantial operational disruption, and additional manufacturing inefficiencies.”

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