Aleris reports higher EBITDA on improved rolling margins & favourable metal spreads

Aleris reported net loss of $26 million in the third quarter of 2018 compared to a net loss of $66 million in the third quarter of 2017. Adjusted EBITDA increased to $77 million in Q3 2018, from $46 million in Q3 2017. Improved rolling margins and favourable metal spreads increased adjusted EBITDA.

"Our dual focus on strengthening operational performance while executing our growth strategy led to a strong third quarter, as we achieved record automotive volumes and saw a sharp improvement in aerospace demand," Sean Stack, Aleris Chairman & CEO said.

Capital expenditures were $25 million in Q3 as compared to $57 million in the third quarter of 2017. Aleris expects 2018 capital spending of approximately $115.0 million to $125.0 million excluding capitalized interest, including $76.3 million spent through the third quarter of 2018.

North America segment income increased to $52 million in Q3 from $20 million in Q3 2017. Segment Adjusted EBITDA increased to $42 million from $21 million in the third quarter of 2017. Improved rolling margins, favourable metal spreads and scrap availability increased segment Adjusted EBITDA approximately $25 million.

Europe segment income increased to $30 million in the third quarter of 2018. Segment Adjusted EBITDA increased to $38 million from $29 million a year ago. A 19 percent increase in automotive volumes and a 14 percent increase in aerospace volumes, as well as a stronger mix of aerospace products sold, increased segment Adjusted EBITDA approximately $4 million.

Asia Pacific segment income increased to $7 million in Q3, from $4 million in the third quarter of 2017. Segment Adjusted EBITDA stood at $6 million. The primary performance driver for segment income and segment Adjusted EBITDA was an improved mix of products sold resulting from a 51 percent increase in aerospace shipments, that increased segment Adjusted EBITDA approximately $2 million.