Tennessee’s semi-fabricated specialty aluminium producer Kaiser Aluminum released results for the third quarter and first nine months of 2022 this week. Although the firm showed many bright spots during the period, significant supply chain problems weighed down the company’s bottom line.
In the third quarter, Kaiser Aluminum recorded US$749 million in net sales, down from US$751 million on the year, and US$356 million in value-added revenue. Year on year shipments dropped by 11 percent, while selling price per pound rose by 12 percent. Meanwhile, value-added revenue rose by 16 percent on the year thanks in part to a 5 percent rise in aerospace/high strength applications.
Net income in the quarter came to US$3 million, down from last year’s third quarter total of US$20 million. Adjusted net income was US$10 million, better by US$1 million on the year. Adjusted EBITDA totaled US$31 million in the just-ended quarter, which was off by US$1 million from last year in part due to supply chain issues and higher major maintenance.
For the year’s first nine months, Kaiser reported US$2.7 billion in net sales, up from US$1.8 billion from last year’s first nine months, largely due to an increase in shipments and in prices. Value-added revenue rose 39 percent to US$1.1 billion thanks to the Warrick plant’s full operation over that period.
Operating income in the first 9 months totaled US$26 million, down from US$82 million the prior year. About US$21 million in non-run-rate charges dented this year’s operating income, the company noted. Kaiser Aluminum reported a net loss of US$3 million, better by US$17 million than the previous year’s first nine months.
Keith A. Harvey, President and Chief Executive Officer, elaborated on the results in a related press release.
“While our third quarter 2022 results were significantly impacted by the magnesium and molten metal supply chain issues at our Warrick rolling mill, we have successfully resolved these challenges that have negatively impacted our financial and operational performance for the past several quarters. As we proceed through the remainder of the year, we are positioned to operate on a more normalized basis, albeit in a challenging environment.”
“With these supply chain challenges behind us, we anticipate our adjusted EBITDA and margin in the fourth quarter will be similar to the first half 2022,” he continued. “We remain focused on continuing to address inflationary challenges through pricing and cost reduction initiatives. Although economic uncertainty persists, our end market outlook remains positive and our strategy remains intact. The fundamentals of our aerospace, packaging, general engineering and automotive end markets continue to be solid and we look forward to continuing to execute on our strategic initiatives to deliver long-term value to all of our stakeholders.”