May 28, 2014
Aleris Sees Loss in First Quarter
Cleveland-based Aleris reported a net loss of $18 million in its first quarter, a reversal of the $11 million profit reported in the same period last year. Net sales of $1.0 billion were down 5.0 percent from same quarter in 2013 for the rolled and extruded aluminum producer.
"Despite the challenging operating environment created by weather and volatile metal prices, we are pleased that we significantly improved our performance over the prior quarter, led by strong growth in demand for automotive body sheet in Europe, which we expect to continue throughout the year," said Steve Demetriou, Aleris chairman and CEO. "With the harsh winter behind us in North America and the completion of our acquisition of Nichols Aluminum, we believe we are building momentum and poised to capture both significant synergies and the anticipated increased demand in the building and construction industry as the projected recovery in the U.S. housing market materializes."
The company's Rolled Products income increased to $27 million from $23 million in the quarter despite a 9 percent decline in volumes due to the weather. Extrusions segment income of $3 million in the first quarter was flat compared to the first quarter of 2013. Volumes increased 10 percent driven by improved automotive demand.
On April 1, Aleris completed its $110 million acquisition of Nichols Aluminum, a leading producer of aluminum sheet for the transportation, building and construction, machinery and equipment, consumer durables, and electrical industries in North America. The acquisition includes casting and finishing operations at two facilities in Davenport, Iowa, as well as finishing operations in Decatur, Ala., and Lincolnshire, Ill. The facilities and approximately 550 employees are now a part of Aleris’ Rolled Products North America segment.
"We estimate second-quarter segment income and adjusted EBITDA will be sequentially higher than the first quarter and in line with the second quarter of 2013," said Demetriou, citing seasonality and improved building and construction volumes, increased demand for auto body sheet and improved metal spreads in specification alloys.