Kaiser Aluminum reports record value added revenue and adjusted EBITDA in Q3 2019

Kaiser Aluminum Corporation announced third quarter and first nine months 2019 results. The company’s net sales dropped from $393 million in Q3 2018 to $375 million in Q3 2019, reflecting a 3% decrease in shipments and a 2% decrease in average selling price.

Value added revenue stood at $215 million, up from $205 million in the prior year period, driven by strong aerospace demand and value added revenue pricing. Adjusted consolidated EBITDA increased to $57 million in Q3.

Net income was $25 million, compared to net income of $22 million. Excluding the impact of non-run-rate items, adjusted net income was $29 million.

For the first nine months of 2019, the company reported net sales of $1.1 billion compared to $1.2 billion, reflecting a 4% decrease in shipments. Value added revenue increased 4% to $642 million.

Adjusted consolidated EBITDA increased $10 million to $160 million. Net income was $73 million compared to net income of $68 million. Excluding the impact of non-run-rate items, adjusted net income was $82 million, an increase from adjusted net income of $80 million last year.

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 $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,” said Mr. Hockema.

"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.”

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