SMM2 25: southern California aluminum company Caesar aluminum (Kaiser Aluminum) last week announced the fourth quarter and full-year results, quarterly earnings per share exceeded expectations for the third time.
Net sales for the quarter were $389 million, down $4 million from $393 million in the third quarter, but better than $353 million in the fourth quarter of last year.
Caesar attributed last year's growth to a 4% increase in shipments and a 6% increase in average selling prices.
Kaiser posted a net profit of $24 million in the fourth quarter, up $2 million from the previous quarter, reversing a loss of $15 million in the fourth quarter of last year.
Adjusted EBITDA was $55 million, up $8 million from the previous quarter and $9 million from a year earlier.
Adjusted net profit was $30 million, up $6 million from the previous quarter and $10 million from a year earlier.
For the company, the fourth quarter was significantly affected by $37 million in non-cash tax increases, as a result of the federal tax reform act revaluing Caesar's deferred tax assets.
For the whole of 2018:
Caesar Aluminum shipped 652 million pounds for the year, an increase of 26 million pounds over the previous year.
Full-year net sales were $1.586 billion, up from $1.398 billion a year earlier, thanks mainly to a 4 per cent increase in shipments and a 9 per cent increase in average selling prices.
Caesar's net income in 2018 was $92 million, more than double that of $45 million in 2017.
Kaiser's adjusted EBITDA last year was $205 million, up $6 million from a year earlier.
Full-year net profit was $109 million, $21 million higher than revenue in 2017.
Jack A. Hockema, chairman and chief executive, said that despite the continuing disadvantages of destocking the aviation supply chain and high metal and cargo costs, Caesar had achieved excellent results in 2018, in line with the prospects conveyed at the beginning of the year.
Driven by strong demand, the company recorded record shipments for the whole of 2018, up 4 per cent from a year earlier and a 5 per cent increase in VAT revenues.
Record commercial aircraft construction has fuelled potential demand growth, and destocking of the aviation supply chain began to slow in the second half of 2018, further contributing to demand growth. Solid automakers in North America continued to increase the content of aluminum extrusion, with demand for general engineering and industrial products remaining strong throughout the year, while seasonal weakness was normal in the second half of the year. The adjusted EBITDA improved from a year earlier as the benefits of sales and combinations were partly offset by the high levels of unrecovered metals and freight and the negative impact of Article 232 tariffs on pricing.
Caesar Aluminum will launch additional price increases for some non-contract general engineering and aerospace applications in 2019, which will improve as demand grows and prices improve.
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