Sept. 3, 2014

Operational Issues Slow Aleris
 
Aluminum maker Aleris Corp., Cleveland, reported a net loss of $17 million during the second quarter, a decrease of 41.6 percent from the same period in 2013. The company posted a loss of $35 million for the first six months, compared to a $1 million loss during the first half last year.

Net sales during the quarter totaled $1.2 billion, 8.7 percent better than the same quarter in 2013. For the first six months of the year, Aleris posted net sales of $2.3 billion, 1.8 percent better than last year. Operational issues in the company’s rolled products segment played a significant role in the quarterly results.

"Stronger overall volumes are confirming our expectation that demand would strengthen in 2014, particularly in our automotive business, which has grown significantly. However, we are disappointed that operational issues and compressed margins in rolled products have prevented us from fully capitalizing on the improved demand, and we are taking steps to address these issues," said Steve Demetriou, Aleris chairman and CEO.

Income in the company's Rolled Products North America segment decreased to $22 million from $33 million in the second quarter of 2013. Aleris cited a weaker mix of products sold into the distribution and building and construction industries, plus operational issues that more than offset the gains from the Nichols Aluminum acquisition.

Extrusions segment income of $4 million in the second quarter was a decline from $5 million in the prior-year quarter. Pricing pressures and inflation were only partly offset by productivity savings.

Aleris expects better segment income during the third quarter due to improved building and construction and distribution volumes, increased demand for auto body sheets and improved metal spreads in specification alloys. Downward pressure will be applied by lower aerospace volumes and pricing issues, and competitive imports that affect margins.

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