Kaiser Aluminum (KALU) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $773–$773.4 million, down 5% year-over-year, with net income of $3–$3.1 million and adjusted net income of $11 million ($0.65 per diluted share).

• Adjusted EBITDA was $53.5–$54 million, with a 14.5% margin, down from 16.8% in Q2 2023, impacted by a $9 million non-cash LIFO charge from inventory reduction.

• Strong operational execution and efficiency focus offset headwinds from a packaging outage and lower commercial aerospace build rates.

• Strategic exit from the Sherman, Texas facility resulted in a $6.8–$7 million restructuring charge.

• Quarterly dividend of $0.77 per share declared and paid during the quarter.

Financial highlights

• Q2 2024 conversion revenue was $369 million, down 3% year-over-year and flat sequentially.

• Adjusted operating income was $25 million, down 34% year-over-year; operating income was $15.5–$16 million.

• Adjusted EBITDA margin was 14.5% in Q2 2024 versus 16.8% in Q2 2023.

• Cash and cash equivalents at June 30, 2024 were $70–$70.4 million; total liquidity was $618–$618.4 million.

• $74 million invested in capital expenditures in H1 2024; $25 million returned to shareholders via dividends.

Outlook and guidance

• Full-year 2024 conversion revenue expected to be flat to up 1%, with adjusted EBITDA margin improving 50–100 basis points over 2023.

• Aerospace/high strength shipments and conversion revenue forecasted to decline 2–3% due to lower commercial jet build rates.

• Packaging shipments and conversion revenue expected to improve 3–4% year-over-year, with recovery in H2 after outages.

• General engineering shipments to improve 3–4%, conversion revenue flat to up 1%; automotive extrusions to see 3–5% growth.

• Roll Coat No. 4 project on track for 2025, expected to boost margins by 300–400 basis points.