Cleveland rolled aluminium firm Aleris International, Inc. reported results for the third quarter and first nine months of 2019 yesterday. The firm’s numbers were up nearly across the board thanks in large part to increased demand and a favorable product mix.
In the third quarter the firm reported a net income of US$25 million, reversing a net loss of US$26 million a year ago. Aleris posted a record adjusted EBITDA of US$115 million, up on the year from last year’s third quarter adjusted EBITDA of US$77 million. Aerospace sales volumes rose thanks to a global rise in demand and growth, while automotive volumes increased thanks to a surge in demand by North American automakers. In addition, North American operations benefited from a favorable metal environment and an improvement in rolling margins in the quarter.
For the year’s first three months Aleris reported revenues of US$2,651 million, up from US$2,644 million, thanks largely to an improved product mix. Net income for the period totaled US$16 million, reversing a net loss of US$68 million last year, which the firm credits to a better adjusted EBITDA (increasing by US$93 million to US$308 million), a drop in debt extinguishment costs, and a fall in start-up costs.
Sean Stack, Aleris Chairman and CEO, said that the quarter’s results are likely a harbinger of even better numbers in the coming months and years.
“Our global aerospace and automotive capabilities along with our North America common alloy and scrap position have once again led the way to another record quarter. We’ve been well positioned to capitalize on demand opportunities in our higher value end uses and we expect this momentum to continue through the end of the year. I am proud of our Aleris team for the unwavering focus on serving customers as we’ve successfully shifted the business toward the production of higher value products.”
Looking ahead the firm estimates an adjusted EBITDA and segment incomes for the fourth quarter to be better on the year but lower than that of the third quarter due to normal seasonal fluctuations. Global aerospace volumes are predicted to rise due to robust demand and fundamentals, and North American automotive sales are expected to be similarly strong due to committed volumes, but may suffer somewhat in the event of labor disruption in the automotive supply chain. Meanwhile, European automotive, heat exchanger and regional end-uses buyers are expected to continue to show a weak demand, and North American rolling margins are seen to continue to post favorable year-over-year numbers.
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.