Kaiser Aluminum sees a 5.4% growth in Q1 sales value, as higher LME aluminium prices offset drops in shipments

Kaiser Aluminum Corporation, an American aluminium producer specialised in highly engineered, semi-fabricated products, has announced its first quarter results of 2025 ended March 31, describing the period as a strong start to the year in terms of financial output amid an uncertain macroeconomic environment. Except for the aerospace product unit, Kaiser's all other business divisions supported the company in achieving an increased sales value of USD 777.4 million versus USD 737.5 million during the corresponding period of the previous year.

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Sector-wise sales, shipment, and revenue conversion

In the packaging business unit, Kaiser Aluminum achieved net sales of USD 314.2 million and conversion revenue of USD 127.4 million in Q1 2025, compared to last year's net sales of USD 298.1 million and conversion revenue of USD 118 million during the same period. In general engineering products and automotive extrusions division, the company generated net sales of USD 181.6 million and USD 66.9 million, respectively, compared to USD 153 million and USD 63.5 million. That reflected a Y-o-Y increase of 18.69 per cent and 5.35 per cent, as indicated by the above figures.

The aerospace unit's Q1 revenue was USD 214.7 million, down by 2.63 per cent from USD 220.5 million, offsetting the growth in the overall sales value. As a result, conversion revenue was USD 120.5 million, down by 11.72 per cent from USD 136.5 million during the corresponding period of the previous year.

However, it is interesting to note that sales value and conversion revenue increased in Q1 despite declining shipments across most business units. Only GE product shipments grew over the year from 58.1 lb to 65.1 lb. Meanwhile, packaging aluminium shipments decreased from 142.4 lb to 130.2 lb, Aero/HS product shipments tumbled from 62.9 lb to 56.3 lb, and automotive extrusion systems dropped from 26.5 lb to 24 lb. The total shipments in Q1 2025 amounted to 275.6 lb, down by 5.3 per cent from 291 lb during the same period of the previous year.

The rise in sales value despite the decline in shipments could be attributed to the increase in the global aluminium price. Throughout the first quarter of 2024, the LME aluminium price stood above USD 2,600 per tonne. For a few intermittent days, it also exceeded USD 2,700 per tonne, driven by supply concerns due to US tariffs imposed upon its trade partners.

Financial output

Kaiser Aluminum also reported that its operating income surged by 70.83 per cent Y-o-Y from USD 24 million to USD 41 million in Q1 2025, attributed to the soaring LME aluminium price. Net income for the quarter reached USD 22 million, up by 22 per cent from USD 18 million in the same period last year. Notably, however, the proportion of net income to operating income was lower this year compared to the previous year.

The company's Adjusted EBITDA in Q1 was USD 73 million, marking an increase of 35 per cent from USD 54 million a year ago. Adjusted net income was USD 24 million in Q1 2025 vs USD 10 million in Q1 2024.

On April 23, Benchmark analysts lowered the price target for Kaiser from USD 100 to USD 74, but retained a 'Buy' rating. The reduction recommended on the current stock price of Kaiser Aluminum reflects a valuation of 9 times projected for the company’s value to EBITDA in FY25.

Project update

While commenting on the Q1 financial and operational Q1 report, Keith A. Harvey, Chairman, President and Chief Executive Officer of Kaiser Aluminum, updated that the company is set to embark on the next phase of growth at Warrick rolling mill, where it is planning to finalise the commissioning of the fourth coating line and preparing for customer qualifications.  He added the company looks forward to completing the Phase VII expansion at our Trentwood rolling mill later this year, providing additional capacity to support the anticipated recovery in the commercial aerospace and general engineering end markets.