Aleris reports net loss for 2018

Beachwood, Ohio-based aluminum producer Aleris has reported a net loss in 2018 of $92 million, compared to a net loss of $211 million in 2017. The company indicates it remains in the due diligence phase in terms of its timing to be acquired by Atlanta-based Novelis Inc.

In remarks accompanying its earnings report, Aleris states, “On July 26, 2018, we announced that we entered into a definitive agreement to be acquired by Novelis Inc., a subsidiary of [India-based] Hindalco Industries Ltd., for approximately $2.6 billion, including the assumption of the company's outstanding indebtedness. The merger is expected to close in nine to 15 months from the date of the definitive agreement, subject to customary regulatory approvals and closing conditions. There can be no assurance that the Merger will be consummated on the expected timing or at all.”

Regarding its 2018 performance, Aleris touted an “adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] of $276 million” in 2018, compared to $201 million in 2017.

Aleris cited “increased commercial shipments from North America” to the sector, including the start of an agreement to be the primary supplier for “an automotive OEM customer under [a] multi-year agreement.”

The firm says it recorded “higher automotive [sector] volumes in Europe” in 2018, which it attributed to “strong demand and [an] improved operating performance.”

Second half aerospace volumes, including what Aleris calls “record aerospace volumes in Asia Pacific,” benefited the status of multi-year contracts and a move toward smaller inventory levels by customers, the firm reports.

In its outlook for 2019, the company says it expects “that segment income and adjusted EBITDA will be higher than 2018, as North America volumes continue to benefit from the mix shift to higher value-added automotive body sheet products and stable U.S. housing industry conditions, while global aerospace volumes are expected to benefit from a return to growth and higher volumes from our new multi-year contracts.”

Aleris produces rolled aluminum products at 13 production facilities in North America, Europe and Asia.