Bonnell Aluminum intends to sell around 173mn lb (78,471mt) of material in 2020 if there is no further COVID-19-related downtime at any of its facilities. 

 

The guidance is lower than its sales volume projection of 201mn lb at the beginning of 2020, and lower than its actual sales volume of 208mn lb in 2019.

 

The company has also lowered its EBITDA guidance from $65mn announced at the beginning of the year to $45mn on the condition that it is able to collect around 98pc of its gross account receivables, which averaged around $65mn at the end of Q1 2020.

 

Tredegar, Bonnell’s parent company, while reporting its Q1 2020 earnings, noted that the aluminum extrusions maker had so far laid off around 240 people until May 6 across its facilities, owing to low demand and temporary plant shutdowns to contain the virus. Bonnell had shut down its Newnan, Georgia facility for two days in late March followed by a week and a half in April. 

 

Bonnell’s Niles, Michigan and Elkhart, Indiana facilities have felt the maximum impact of the shutdowns because more than 80pc of products manufactured at these facilities are sold to consumer durables, construction, and automotive markets—all of which have been shut down during the pandemic. The resultant decline in demand, as well as the two plants’ projected EBITDA, prompted the company to write off the plants’ goodwill worth $13.7mn.

 

In Q1 2020, the company’s sales volumes declined by 11.7pc to 47,317lb from 53,616lb during the same quarter last year. Its net sales declined by 15.2pc to $117,887 last quarter from $139,047 in Q1 2019.

 

The company’s EBITDA from ongoing operations totaled $11,677 at the end of Q1 2020, a decrease of 27.8pc from $16,166 at the end of the same quarter in 2019. 

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