Cleveland-based rolled and secondary aluminum producer Aleris Inc. has reported net losses in both the fourth quarter of 2016 and for the year as a whole.
In the fourth quarter of 2016, Aleris has reported a net loss of $35 million compared with a $13 million loss in the fourth quarter of 2015. For the year 2016, the company has reported a net loss of $76 million compared with net income of $49 million in 2015.
Regarding its pending merger, announced in late August 2016, with Zhongwang USA LLC, Aleris says (with four weeks remaining in the month of March) that “the merger is targeted to close in the first quarter of 2017, subject to customary regulatory approvals, including the receipt of approval from the Committee on Foreign Investment in the United States.”
The company adds, “Upon consummation of the merger, Aleris Corporation is expected to be a direct, wholly owned subsidiary of Zhongwang USA, which is expected to be indirectly beneficially owned by entities affiliated with Mr. Liu Zhongtian and other investors and financial institutions.” Liu Zhongtian is chairman of Liaoning, China-based China Zhongwang Holdings Ltd.
Reviewing the firm’s 2016 results, Aleris and its Chairman and CEO Sean Stack say the company faced “unfavorable impacts of $17 million from challenging metal spreads [and] $5 million from foreign currency” rate fluctuations.
Stack cites the company’s operations in China and Kentucky as bright spots for Aleris. “Our China facility doubled its aerospace volumes over the past year and contributed positively to our results, while our Lewisport [Kentucky] automotive expansion is on track to hit key milestones and begin serving customers later this year,” he comments.
“We are also encouraged by additional volume from our global aerospace customers that will provide a strong base for long-term growth,” adds Stack.
Looking ahead to its first quarter of 2017 financials, the company says it sees “favorable scrap spread trends as aluminum prices increase” but that it may also experience “lower volumes and a lower value-added mix of products sold.”