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Kaiser Aluminum Reports Q4 and 2019 Results

Metal News - Published on Fri, 21 Feb 2020

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Kaiser Aluminum Corporation announced fourth quarter and full year 2019 results. C Kaiser Aluminum Chairman and Chief Executive Officer Mr Jack A Hockema said "We achieved several financial milestones in 2019, including record value added revenue, adjusted EBITDA, adjusted net income and adjusted earnings per diluted share. These milestones were accomplished despite planned and unplanned downtime at our Trentwood facility in Spokane, Washington in the first half of 2019, the impact of the General Motors strike in the second half of the year, and reduced sales and inefficiency related to the significant number of automotive model changeovers in 2019. "We were proactive to enhance our financial and operational position during the year. Capitalizing on attractive credit markets, we successfully completed two new debt financings that increased liquidity. This enhanced financial flexibility will support our strategic investment initiatives, ensuring our continued financial strength throughout the business and economic cycles. In addition, we recently finalized a new labor agreement that extends through 2025 for our two largest facilities in Spokane, Washington and Newark, Ohio.”

Full year 2019 results were driven by record aerospace shipments and strong value added pricing, partially offset by lower general engineering and automotive shipments. Strong aerospace demand was driven by growing military airframe builds and restocking in the commercial aerospace supply chain. The strong demand provided a favorable environment for non-contract pricing on the Company's aerospace and industrial products. Results were negatively impacted by heat treat plate capacity constraints at the Company's Trentwood facility due to planned and unplanned downtime during the first half of 2019. Lower shipments of the Company's general engineering applications resulted primarily from allocating a portion of its heat treat plate capacity to meet the strong aerospace demand during the year. In addition, demand for general engineering and industrial applications began to slow in the second half of 2019, and supply chain destocking resulted in additional pressure on demand for the Company's products. Automotive shipments reflected lower build rates, a significant number of automotive model changeovers and new program delays, in addition to the impact of the General Motors strike in the latter part of 2019.

Fourth Quarter 2019
Net Sales USD 369 Million; Value Added Revenue USD 213 Million, Up 1% Year-over-Year
Net Loss USD 11 Million
Adjusted Net Income USD 29 Million
Adjusted EBITDA USD 52 Million; Adjusted EBITDA Margin 24.5%

Full Year 2019:
Net Sales USD 1.5 Billion; Record Value Added Revenue USD 856 Million, Up 3% Year-over-Year
Net Income USD 62 Million
Record Adjusted Net Income USD 111 Million
Record Adjusted EBITDA USD 213 Million; Adjusted EBITDA Margin 24.9%
Trentwood Capacity and Efficiency Hindered by Planned and Unplanned Downtime on Key Equipment

2020 Outlook - "Looking forward, we expect that the impact of the Boeing 737 MAX situation on our aerospace shipments will be offset by higher general engineering and automotive shipments than in 2019, resulting in a low-single-digit year-over-year increase in both total shipments and value added revenue. With a market environment continuing to support strong value added pricing and with expected efficiency gains in both our automotive operations and at our Trentwood facility, we expect to achieve an EBITDA margin above 26% for the full year."

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Posted By : Rabi Wangkhem on Fri, 21 Feb 2020
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