Kaiser Aluminum’s 2018 net sales up approximately 13%; Value added revenue for aerospace application increases 6%

Kaiser Aluminum Corporation announced results for the fourth quarter and full year ended December 31, 2018. For the fourth quarter of 2018, Kaiser reported net sales of $389 million, from $353 million last year, reflecting 4% higher shipments and a 6% increase in average selling price. Value added revenue increased 8% year-over-year to $210 million.

Adjusted consolidated EBITDA stood at $55 million, up $7 million YoY. Net income was $24 million, compared to net loss of $15 million. Adjusted net income was $30 million.

For the full year of 2018, net sales were $1.6 billion, up approximately 13% from $1.4 billion in the prior year period, reflecting 4% higher shipments and a 9% increase in average selling price.

Value added revenue increased 5% to $828 million. Value added revenue for the Company’s aerospace/high strength applications increased 6% to $455 million.

Value added revenue for general engineering applications increased 8% over the prior year to $233 million. Value added revenue for automotive extrusions decreased 1% to $117 million on a 3% increase in shipments reflecting a lower value added product mix.

Adjusted consolidated EBITDA stood at $205 million, up $6 million YoY. Net income was $92 million, compared to net income of $45 million. Adjusted net income was $109 million.

Jack A. Hockema, Chairman and Chief Executive Officer said: “Kaiser delivered excellent results in 2018, consistent with the outlook communicated at the beginning of the year and despite persistent headwinds from aerospace supply chain destocking, high contained metal and freight costs and Section 232 tariffs.”

“For the full year 2018 we achieved record shipments, up 4% year-over-year, and value added revenue, up 5%, driven by strong demand. Record commercial airframe builds drove underlying demand growth, and aerospace supply chain destocking began moderating in the second half 2018, further enhancing demand growth. Aluminium extrusion content continued to increase on solid North American automotive builds, and demand for general engineering and industrial products remained strong throughout the year with normal second half seasonal weakness. Adjusted EBITDA improved $6 million year-over-year as sales volume and mix provided a $21 million benefit partially offset by an $11 million adverse pricing impact due to unrecovered high contained metal and freight costs and $3 million of Section 232 tariffs.”

“Our second half 2018 results were a record for the last six months of a year,” said Hockema. “Aerospace supply chain destocking began to moderate, and underlying commercial airframe demand was strong as build rates continued to grow. In addition, we realized the full impact of proactive price increases implemented during the second quarter of 2018.  We have initiated additional price increases in 2019 for certain non-contract general engineering and aerospace applications and, with growing demand and improving prices, we have positive momentum as we begin 2019.”