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Dec 31, 2023
Kaiser Aluminum Q4 2023 Earnings Report
Reported a decrease in net sales but an increase in conversion revenue, with aerospace/high strength applications achieving record net sales and conversion revenue.
Key Takeaways
Kaiser Aluminum reported fourth-quarter results with net sales of $722 million and conversion revenue of $361 million. Net income was $8 million, or $0.47 per diluted share, while adjusted net income was $10 million, or $0.60 per diluted share. Adjusted EBITDA was $52 million, with a margin of 14.3%. The company saw strong performance in its aerospace/high strength applications but faced challenges in other markets due to destocking activities.
Net sales decreased modestly to $722 million compared to the prior year period, reflecting a 6% decrease in shipments and a 1% decrease in average selling price per pound.
Conversion revenue increased by 2% to $361 million compared to the prior year period.
Aerospace/high strength applications achieved record net sales and conversion revenue, with a 42% increase driven by strengthening demand and a favorable product mix.
Packaging applications experienced a 12% decrease in net sales due to ongoing destocking, primarily for coated food products.
Forward Guidance
Kaiser expects demand to improve across key markets throughout 2024. Conversion revenue for the full year 2024 is expected to improve 2% - 3% with adjusted EBITDA margins to improve 70 - 170 basis points over 2023.
Positive Outlook
- Strong momentum from 2023 in aerospace/high strength applications is expected to continue, supported by customer declarations for commercial jets and strong demand for defense, space, and business jets.
- Shipments and conversion revenue in packaging applications are expected to improve as destocking ends in coated food products.
- Anticipated steady demand improvements for both beverage and food products as the year progresses.
- General engineering destocking is expected to continue to abate in the first half of 2024 with improving shipments in the second half of the year.
- Automotive extrusions demand is expected to continue its modest recovery with steady shipments and conversion revenue.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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