Kaiser Aluminum Reports Q3 & 9 Month Results

Kaiser Aluminum Corporation has announced third quarter and first nine months 2019 results. Mr Jack A Hockema, Chairman and Chief Executive Officer, said “Third quarter 2019 results established new records for value added revenue and EBITDA, driven by continued strength in our aerospace order book and strong value added pricing. These results were achieved despite weakening industrial demand exacerbated by destocking throughout the supply chain and lower than anticipated automotive shipments due to delays in new program launches and the General Motors strike. General engineering shipments also reflected the allocation of a portion of our general engineering plate capacity to meet strong aerospace customer demand. Record nine month 2019 results for value added revenue, EBITDA and adjusted earnings per diluted share confirm strong underlying momentum. Strong results were achieved despite the approximately USD 15 million EBITDA impact of planned and unplanned downtime at our Trentwood facility in Spokane, Washington, and the impact from our automotive programs transitioning from end-of-life programs to new program launches.”

He added "Driven by a strong aerospace order book, we anticipate fourth quarter 2019 results will be similar to the fourth quarter 2018, reflecting the impact of normal seasonal demand weakness, slowing industrial demand and a potential $3-$6 million EBITDA impact related to the General Motors strike, depending on how quickly demand ramps up in the supply chain. For the full year 2019, we continue to anticipate low to mid-single digit percent year-over-year growth in value added revenue and an EBITDA margin above 25%. Shipments are expected to be down year-over-year as our mix has shifted towards higher value added aerospace products.

Long-term Aerospace Demand and Capacity Outlook “Although timing of the Boeing 737-MAX resolution remains uncertain, our aerospace order book is strong with solid visibility well into 2020. Our Trentwood facility has been operating near capacity for more than a decade as growing demand for our aerospace and general engineering plate has absorbed six separate phases of capacity expansion. As aerospace demand has further increased over the past twelve months, our order book has been exceptionally strong resulting in the need to allocate some of our general engineering plate capacity to meet our strong customer demand. We expect to have increased capacity available in 2020 as we continue to realize the full benefits of the Trentwood modernization in addition to expecting significantly less downtime than we experienced in the first half 2019. However, as we continue to monitor the long-term needs of our customers, our team has developed a future state vision for additional brown site expansions at Trentwood that can be implemented in phases to accommodate expected customer demand needs well beyond the next decade. We are closely evaluating those needs and opportunities to assess timing for the next phases of expansion.”

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