Kaiser Aluminum Turns In Record Earnings Numbers in FY2016

California’s semi-fabricated aluminium maker Kaiser Aluminum released results for the fourth quarter and full year of 2016 on Tuesday, posting numbers largely better in both periods.

Kaiser’s net sales for the fourth quarter last year totaled USD332 million, up slightly quarter-on-quarter from last quarter’s total of USD321 million, and better year-on-year than 2015’s Q4 total of USD317 million. Net income for the quarter came in at USD25 million, better than the previous quarter’s total of USD15 million, and better year-on-year than 2015’s Q4 total of USD13 million. Adjusted EBITDA in the quarter totaled USD52 million, up quarter-on-quarter from Q3’s total of USD45 million, and up year-on-year from the same period in 2015, when it totaled USD40 million. The adjusted EBITDA margin was 25.8%, up quarter-on-quarter from last quarter’s number of 22.8%, and up year-on-year from 2015’s Q4 number of 20.8%.

Kaiser’s sales for the year totaled USD1.331 billion, down slightly year-on-year from last year’s total of USD1.392 billion. Its value-added revenue totaled USD813 million, which was good for a 3% increase year-on-year from last year’s total of USD790 million. Net income for the year totaled USD92 million, a stark reversal from 2015’s net loss of USD237 million. Adjusted EBITDA came in at USD207 million, better than last year’s total of USD183 million. Adjusted EBITDA margin for the year was 25.4%, up from 2015’s margin of 23.2%.

“Our fourth quarter 2016 results reflect solid underlying demand with normal year-end seasonal weakness. Strong shipments and value added revenue were supported by delivery of the unusually high in-transit aerospace plate inventory at end of the third quarter. Earnings benefited from strong sales margins, as the negative impact of competitive price pressure was more than offset by favorable product mix, and strong underlying manufacturing efficiency,” said CEO and Chairman Jack A. Hockema.

“Going forward we will continue to proactively invest in initiatives for organic growth and asset integrity and will seek complementary inorganic growth opportunities to create additional value for our shareholders. In addition, we will continue to return cash to shareholders through quarterly dividends and share repurchases,” he went on.

“The combined effect of lower sales margins, higher planned major maintenance, and reduced operating efficiencies is expected to drive down our first half 2017 adjusted EBITDA margin to the low 20s. However, we expect these headwinds will be temporary, and the project-related work at Trentwood this year will serve to further enhance our competitive position and enable us to address strong demand anticipated in 2018 and 2019. While market conditions will ultimately drive demand and product pricing, our strategy and execution will continue to determine our success over the longer term,” Hockema concluded.