Kaiser Aluminum Corporation, a leading producer of semi-fabricated specialty aluminium products, announced first quarter 2019 results. The Company reported net sales of $395 million in Q1 2019, up approximately 2% year-on-year. Adjusted consolidated EBITDA for the quarter stood at $56 million, up $8 million YoY.

Jack A. Hockema, Chairman and Chief Executive Officer said: “Continuing the positive trend from the second half 2018, we reported strong first quarter 2019 results. Improving aerospace demand and non-contract value added pricing drove strong results in the quarter, partially offset by approximately $5 million of cost inefficiencies at our Trentwood facility, a combination of unplanned equipment downtime in the finishing operations and purchased rolling ingot costs necessitated by our planned casting furnace rebuilds.”

Value added revenue in Q1 2019 increased 8% YoY to $218 million on a 2% decrease in shipments, compared to $203 million in Q1 2018.  Value added revenue for aerospace/high strength applications increased 17% to $125 million and shipments increased 17%. Value added revenue for general engineering applications increased 2% to $62 million on 15% lower shipments. Value added revenue for automotive extrusions decreased 15% to $26 million, reflecting a 4% decrease in shipments.

Net income for Q1 2019 was $28 million, compared to net income of $26 million for the prior year period. Adjusted net income was $30 million, up from adjusted net income of $27 million for Q1 2018.

 “The recent reduction in Boeing 737-MAX build rates has introduced uncertainty for commercial aerospace industry demand. While it is likely that the reduced build rates will eventually lead to some level of supply chain destocking, the amount and timing are uncertain until the situation is resolved. Meanwhile, demand for military aircraft continues to increase for the new generation F-35 Joint Strike Fighter and the modernized F-15X Super-fighter and F/A-18E/F Super Hornet fighter aircraft,” said Mr. Hockema.

“…we are focused on executing on our strategic initiatives to capture the full efficiency and capacity benefits from our recent Trentwood investments and to position the Company for expected strong automotive extrusion shipments growth in 2020 and 2021.”

 “Overall, while we continue to monitor the 737 MAX situation, at this time we have no specific information to warrant a change in our full year 2019 outlook for EBITDA margin above 25% and low to mid-single digit percent year-over-year increase in both shipments and value added revenue,” concluded Mr. Hockema.