Aleris Foresees Favorable Scrap Spreads in North America

SEATTLE (Scrap Monster): Aleris Corporation-the leading manufacturer and seller of aluminum rolled products has announced the results for fourth quarter and the full year 2017.

The net loss for the quarter ending 31^st December 2017 widened to $107 million in Q4 ’17, as compared with the net loss of $35 million during the corresponding quarter in 2016. The full year net loss too widened from $76 million in 2016 to $211 million in 2017. The net loss widening was mainly on account of one-time tax items, start-up and write-off expenses. The fourth quarter adjusted EBITDA in 2017 dropped to $37 million compared to $43 million in Q4 of 2016. The full year adjusted EBITDA too dropped marginally from $205 million in 2016 to $201 million in 2017.

The North America segment adjusted EBITDA increased to $15 million in Q4 2017, as compared with $14 million in fourth quarter of 2016. The rising aluminum prices resulted in favorable scrap spreads in the region. The improved scrap availability also resulted in earnings boost by the region.

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The European segment reported decline in adjusted EBITDA from $34 million in Q4 ’16 to $26 million in Q4 last year. Unfavorable cost absorption cut the EBITDA by nearly $6 million. Aerospace volumes reported 3% decline during the quarter. Meantime, the adjusted EBITDA of Asia Pacific segment remained flat at $5 million.

For the full year 2017, aluminum usage in automotive applications witnessed steady growth. Estimates suggest that demand for aluminum in North America is likely to hit 3.4 billion pounds by 2025. To meet the projected increase in demand, Aleris has already committed investment of $425 million to boost the product offerings from is North American operations.

Aleris expects the full year segment income and adjusted EBITDA to be substantially higher in 2018. Commercial shipments from Lewisport CALP 1 are expected to show significant ramp-up in second half of 2018. Also, Aleris expects favorable year-over-year ferrous scrap spreads in North America during next year.