COVID-19 impact: Kaiser Aluminum’s value added revenue decreased to $175 million in Q2

Kaiser Aluminum Corporation, a leading producer of semi-fabricated specialty aluminium products, announced second quarter 2020 results. Net sales for the second quarter 2020 were $276 million, from $375 million in the prior year period, reflecting a 24% decrease in shipments and a 4% decrease in average selling price.

Value added revenue decreased to $175 million from $209 million, reflecting a 24% decrease in shipments as demand across end markets was impacted by COVID-19 as customers temporarily shut down operations and curtailed deliveries during the quarter.

“Second quarter shipments and value added revenue reflect the impact of lower demand across our end markets due to the effects of COVID-19,” said Keith A. Harvey, President and Chief Operating Officer. “As we experienced rapid changes in business conditions, we executed on our business model and aggressively flexed costs and operating levels at our facilities in response to lower demand. Although there is often a lag with certain cost and related benefits, our highly variable cost structure allows us to react quickly, and flex costs through the cycles. Despite the decline in end market demand, pricing has held steady,” said Mr. Harvey.

Adjusted EBITDA stood at $34 million in the second quarter of 2020, reflecting the impact from lower value added revenue and operating leverage.

The company reported net loss of $7 million, or loss of $0.41 per diluted share, compared to net income and diluted earnings per share of $19 million and $1.18, respectively, for the prior year period.

Excluding the impact of non-run-rate items, adjusted net income was $6 million or $0.36 per diluted share for the second quarter 2020.