NEW YORK Aleris
International Inc. posted a $6.9-million net loss in the fourth
quarter of 2012, squeezed by the effects of "continued margin
pressure in the scrap market in the face of steady demand," the
"Tight metal spreads continue to
negatively impact margins in our specification alloy business,
which hurt our overall results for the quarter and the year,"
chairman and chief executive officer Steven J. Demetriou said
during a conference call with analysts. "To restore
profitability and reduce volatility in our specification alloy
business, we are working towards better aligning the cost of
scrap used to produce the products we offer our customers."
companys net losson sales that fell 3.7 percent to
$1.02 billion from nearly $1.06 billion in the same period a
year earlierwas in sharp contrast to net income of $19.8
million in the fourth quarter of 2011. The company attributed
the loss to startup expenses for a new rolling mill in
Zhenjiang, China, restructuring charges associated with efforts
to reduce general expenses, and an increase in depreciation and
amortization expenses as a result of capital investment, among
The companys Recycling and
Specification Alloys North America segment continued to
experience "pressure on metal spreads resulting from the
combination of lower selling prices for the segments
products caused by lower aluminum prices and higher scrap
prices due to limited scrap availability." The segment posted
fourth-quarter adjusted earnings before interest, taxes,
depreciation and amortization (Ebitda) of $13.2 million, down
29.4 percent from $18.7 million a year earlier.
Meanwhile, the Rolled Products
North America segment showed a volume increase of 8 percent in
the fourth quarter thanks to demand from the building and
construction industry, and adjusted Ebitda increased 6.5
percent to $23 million from $21.6 million a year earlier.
Aleris posted full-year net
income of $107.5 million, down 33.5 percent from $161.6 million
in 2011 on sales that fell 8.6 percent to $4.41 billion.
Despite the decline, Aleris noted "strong global market
volumes, led by aerospace, and (an) improved overall mix of
Meanwhile, the company completed
several expansion projects designed to increase capacity and
improve production. "I am extremely proud of the Aleris
teams outstanding execution of several strategic growth
initiatives in 2012, substantially competing construction of
our state-of-the art mill in Zhenjiang, China, and a new cold
mill for the production of wide auto-body sheet in Duffel,
Belgium, and our paint line expansion in Ashville, Ohio,"