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Dec 31, 2020
Kaiser Aluminum Q4 2020 Earnings Report
Reported solid execution under very challenging business conditions.
Key Takeaways
Kaiser Aluminum Corporation reported fourth quarter and full year 2020 results, reflecting solid execution under very challenging business conditions. Value added revenue for the fourth quarter 2020 decreased to $152 million from $213 million in the prior year period, primarily driven by the decline in commercial aerospace demand.
Net sales for the fourth quarter 2020 were $272 million compared to $369 million in the prior year period, reflecting a 22% decrease in shipments and a 6% decrease in average selling price.
Value added revenue for the fourth quarter 2020 decreased to $152 million from $213 million in the prior year period, primarily driven by the decline in commercial aerospace demand.
Adjusted EBITDA of $29 million in the fourth quarter 2020 decreased $24 million compared to the prior year period reflecting the total sales impact of approximately $30 million, offset by lower costs flexed with the reduction in volume.
Reported net income for the fourth quarter 2020 was $6 million, or $0.37 per diluted share, compared to net loss and diluted loss per share of $11 million and $0.66, respectively, for the prior year period.
Revenue by Segment
Forward Guidance
For the full year 2021, the company anticipates total value added revenue up 5% to 10% year-over-year and an adjusted EBITDA margin comparable to 2020 driven by strong growth in automotive, defense and general engineering applications.
Positive Outlook
- Total value added revenue up 5% to 10% year-over-year
- Adjusted EBITDA margin comparable to 2020 driven by strong growth in automotive, defense and general engineering applications.
- Value added revenue and shipments for the Company’s automotive extrusion applications are anticipated to increase 35% to 45% year-over-year
- General engineering value added revenue and shipments are anticipated to increase 10% to 15% year-over-year reflecting solid service center and end market demand driven by continued growth in semi-conductor and automotive demand.
- The transaction is anticipated to close on March 31, 2021 and is expected to be immediately accretive to earnings and cash flow.
Challenges Ahead
- Value added revenue for the Company’s aerospace/high strength applications to be down 5% to 8% year-over-year on slightly lower shipments compared to 2020
Historical Earnings Impact
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Avg. Return Before/After Earnings
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