Aug. 7, 2013
Aleris Reports Quarterly Loss
Cleveland-based Aleris reported a net loss of $12 million during the company’s second quarter, a reversal from the $34 million in income posted during the same period last year. The aluminum maker reported a net loss of $1 million for the first six months, compared to net income of $82 million for the 2012 first half.
Net revenues for the second quarter declined 3.6 percent to $1.1 billion. For the year to date, the company’s net revenues dipped 3.2 percent to $2.2 billion.
“As expected, we generated solid sequential improvements in performance despite continued headwinds from metal and scrap spreads and sluggishness in the global economy,” said Steve Demetriou, Aleris chairman and CEO, in recent comments to investors and analysts.
Income in Aleris’ Rolled Products North America segment declined modestly in the second quarter to $33 million based on continued pressure from common alloy imports and tighter scrap spreads, offset somewhat by a higher value-added mix of products and productivity savings, management reported.
The company’s Rolled Products Europe segment also suffered a small decline to $39 million in income due to pricing pressures and higher employee and energy costs. The RPE segment enjoyed an 11 percent increase in volumes.
Second-quarter income from Aleris’ Extrusions segment was consistent with 2012, up $1 million to a total of $5 million. Volumes increased 2 percent as increased demand for transportation and automotive products offset the effect of the continued weakness in the European economy on demand for building, construction and engineered products.
Aleris executives estimate third-quarter 2013 income will be in line with second-quarter and third-quarter 2012 levels as a result of increased demand from the higher value-added global automotive market segment and the North American building and construction industry.
Given the current LME price of aluminum, Aleris expects that scrap spreads in the North American rolled products business will continue to be tight. Weaker demand from the global aerospace industry is also expected over the next several quarters as aircraft manufacturers look to destock current high levels of raw material inventory.
“In the second half of 2013 and into 2014, we expect to see steady improvements in our results based on the contributions from growth initiatives and an expected recovery in the global economy,” Demetriou said.