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Market-driven headwinds fail to dampen Kaiser Aluminum’s Q1 2017 performance
A leading producer of fabricated aluminium products for high-strength aerospace and automotive applications, Kaiser Aluminum Corporation, today announced its first quarter 2017 results. The net income rose to US$36 million from US$25 million in Q4 2016 and US$26 million in Q1 2016. Earnings per diluted share increased from US$1.44 in the previous year to US$2.04 in Q1 2017.
Excluding the impact of non-run-rate items, Kaiser's adjusted net income for Q1 2017 was $27 million compared to the adjusted net income of $28 million in the corresponding period previous year. The company's net sales amounted to US$355 million, up 3.49 per cent from the same period previous year. However, Value added revenue for the period under consideration was down by three per cent on higher shipments.
Commenting on the results, Kaiser Aluminum Chairman and Chief Executive Officer Jack A. Hockema said, “Overall, we achieved solid first quarter results. 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."
"The unfavourable sales impact during the quarter was largely offset by favourable price spreads on scrap raw material purchases and lower major maintenance and overhead costs. Significantly improved manufacturing efficiency across our extrusion/drawn facilities more than offset the temporary construction-related inefficiencies at Trentwood," Hockema added.
Kaiser's outlook for the first half 2017 remains fairly optimistic. As per Hockema's statement, 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 company expects to emerge from 2017 with strong industry demand approaching 10 per cent annual growth rate for aerospace applications in both 2018 and 2019 driven by growing commercial aerospace builds, recovering growth for business jets, and solid growth in military aircraft.Get fresh Aluminium data and insights
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