Kaiser Aluminum has suspended its earnings guidance for the remaining three quarters of 2020 because the COVID-19 pandemic has created too much market uncertainty.
While announcing its Q1 2020 earnings results and company performance, the company noted that it would be difficult to make projections for remainder of the year, in spite of its strong financial position.
The specialty aluminum maker’s Q1 sales suffered in March after most automotive manufacturers and original equipment manufacturers (OEMs) suspended operations to contain COVID-19, the company said in its earnings statement. Demand from the aerospace industry, another key customer, also dwindled last month because of the virus outbreak.
During Q1 2020, Kaiser’s net shipments fell to 156mn lb (70,760mt) from 163mn lb during the same quarter of 2019. However, volumes increased from Q4 2019’s 153mn lb. Kaiser said its automotive segment experienced fewer shipments because demand plummeted in March.
The company’s net sales in Q1 2020 fell by 4pc to $369mn from $395mn during the same quarter last year, mostly due to revenue from its value added products falling by 4pc to $217mn from $218mn in Q1 2019. The company also reported a 2pc decline in its average selling price.
Kaiser noted that while shipments for its aerospace segment decreased by 1pc during the quarter, revenue for value added products in that segment increased by 4pc to $130mn compared to the same period last year.
The company’s EBITDA increased by $3mn to $59mn in Q1 2020 compared to the previous year, as did its net income, which rose by $1mn to $29mn during the comparative periods.