March 19, 2014
Aleris Reports Loss for 2013
Cleveland-based aluminum maker Aleris reported a net loss of $37.1 million in 2013, a sharp decline from the $107 million in income in 2012. Net revenues in 2013 declined 1.8 percent from the previous year to $4.3 billion.
In the fourth quarter, Aleris reported a net loss of $29 million, compared to a net loss of $7 million during the same period the previous year. Fourth-quarter net revenues of $1.0 billion were flat from the same quarter of 2012.
"Despite our best efforts, 2013 was a disappointing year, and we are sharply focused on improving productivity and driving better performance in 2014. We are also extremely excited about our agreement to acquire Nichols Aluminum as we believe it will enhance our ability to serve customers in North America. We look forward to transitioning the Nichols employees and operations into Aleris when the transaction clears customary regulatory approvals," said Aleris Chairman and CEO Steve Demetriou during the company's quarterly meeting with investors and analysts.
Income from the company's Rolled Products North America segment decreased from $26 million to $4 million during the fourth quarter, driven by a 6 percent decline in shipped volume due to lower demand from the transportation industry. Other factors included inventory reduction efforts, tighter scrap spreads requiring use of more primary aluminum, continued pricing pressures and higher costs. These offset the productivity savings of $4 million from the company's new Ashville, Ohio, wide coating line and other initiatives.
The company's Rolled Products Europe segment reported net income of $17 million in the fourth quarter, down slightly from 2012. Volumes were up 5 percent in Europe, with gains in automotive offsetting declines in aerospace.
Aleris' Extrusions segment posted break-even income in the fourth quarters of 2013 and 2012. Volume increased 7 percent as increased demand for automotive products offset the impact of the continued weakness in European demand for building, construction and engineered products.
Aleris estimates first-quarter 2014 segment income will be sequentially higher than the fourth quarter of 2013 but lower than the first quarter of 2013 due to the following factors: aircraft manufacturers shedding excess plate inventories; the difficult winter affecting volume and scrap availability; low LME prices pressuring scrap and metals spreads; and volatility disrupting customer order patterns. On a positive note, demand for aluminum autobody sheet is expected to grow.
"We remain diligent in executing our strategic growth initiatives, securing strong volumes from increased automotive demand through our expanded Duffel, Belgium, facility and attaining a key qualification to pave the way for the production of aircraft material at our new plate mill in Zhenjiang, China," Demetriou said.