Actualizado 29/08/2006 20:57
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TK Aluminum Ltd. Reports Financial Results for the Second Quarter Ended June 30, 2006 and for the First Six-Months Perio

CARMAGNOLA, Italy, August 29 /PRNewswire/ -- For the first half of 2006, Teksid Aluminum reports net revenues of EUR556.4 million and Adjusted EBITDA of EUR24.4 million. Sales were up 7.3%, as compared to the prior year, due to aluminum price increases and foreign exchange movements. Adjusted EBITDA, down 36.8%, was materially impacted by raw material price increases, cost inflation and operational inefficiencies

TK Aluminum Ltd., the indirect parent of Teksid Aluminum Luxembourg S.à r.l., S.C.A., today reported its consolidated financial results for the second quarter ended June 30, 2006 and for the first six-months period of 2006.

"Despite a challenging automotive environment, Teksid Aluminum's revenues continue to grow due to aluminum price increases," reported Jake Hirsch, CEO. "Compared to 2005 net revenues for the first half of 2006 grew by 7.3% while Adjusted EBITDA decreased by 36.8%. We have, nonetheless, increased second quarter Adjusted EBITDA to EUR17.4 million approximately EUR10 million more than Q1. Our operating results have benefited from continued operational restructuring and cost saving plans, which were off set by aluminum hysterisis, reduced tooling profits and unsatisfactory efficiency improvements from selected plants."

Consolidated financial results for the second quarter ended June 30, 2006 and for the first six-months period of 2006

The table below contains certain financial information of the Company for the second quarter ended June 30, and the six-months period of 2006 and 2005, respectively. All amounts included herein for the prior year periods have been adjusted to reflect the previous restatement of certain financial information related to the Brazilian investigation reported in the prior year.

    
    EUR m  Three-Months Period Ended June 30  Six-Months Period Ended June 30
    (except                                  
    tons)            2006          2005 (as          2006         2005 (as
                                   restated)                      restated)

    K/Tons           55.0            57.1           111.2           112.5
        Net        EUR281.8        EUR269.0        EUR556.4       EUR518.4
     Revenues
      EBITDA        EUR5.2          EUR31.8         EUR9.1         EUR52.6
     Adjusted       EUR17.4         EUR22.3        EUR24.4         EUR38.6
      EBITDA
     Net Loss       EUR24.8         EUR2.4         EUR43.8         EUR10.7
       Capex        EUR11.0         EUR9.9         EUR17.8         EUR29.8
     Net Debt      EUR345.4        EUR320.3        EUR345.4       EUR320.3
        (a)

(a) Net Debt at December 31, 2005 was EUR313.1 m

Net Revenues increased as a result of an increase in the price of aluminum and a positive foreign exchange impact

Net Revenues for the second quarter of 2006 were EUR281.8 million, an increase of 4.8% compared to the same period in 2005. Assuming constant exchange rates, Net Revenues in the second quarter of 2006 were 2.9% higher as compared to the same period in 2005.

Net Revenues for the first six-months period of 2006 were EUR556.4 million, an increase of 7.3% compared to the same period in 2005. Assuming constant exchange rates, Net Revenues in the first six-months period of 2006 were 2.4% higher as compared to the same period in 2005. Net Revenues in the current period were primarily affected by aluminum price increases partially offset by reduced tooling sales and contractual price give backs.

Adjusted EBITDA was positively impacted by operational restructuring and cost savings offset by a rapid increase in aluminum costs and operating inefficiencies

Adjusted EBITDA for the second quarter of 2006 was EUR17.4 million or 6.2% of Net Revenues compared to Adjusted EBITDA for the same period in 2005 of EUR22.3 million, which was 8.3% of Net Revenues.

Adjusted EBITDA for the first six-months period of 2006 was EUR24.4 million or 4.4% of Net Revenues compared to Adjusted EBITDA for the same period in 2005, which was EUR38.6 million or 7.4% of Net Revenues. Adjusted EBITDA in the reported period was positively impacted by cost saving initiatives of EUR12.6 million, by savings of EUR4.3 million on our restructuring program, by EUR6.1 million of other miscellaneous items and by EUR0.7 million of foreign exchange effect. This improvement was offset by (i) the negative impact of continued aluminum price increases and the time lag in the pass through of such increases to customers, including the negative effect of spot-buy vs. contractual purchases that particularly occurred in the second quarter, in the aggregate, of EUR10.9 million, (ii) inflation costs of EUR9.2 million, (iii) cost inefficiencies in North America and France of approximately EUR9.1 million, (iv) decreased tooling profit of EUR4.7 million as a result of the completion of the ramp up of certain commercial programs and (v) OEM contractual price give backs and less favourable product mix of approximately EUR4.0 million.

For a definition and reconciliation of Net Loss to Adjusted EBITDA see enclosed attachment.

Net Loss increased primarily due to lower operating performance, higher interest costs and negative foreign exchange impact

Net Loss for the second quarter of 2006 was EUR24.8 million compared to same period in 2005 when net loss was EUR2.4 million.

Net Loss for the first six-months period of 2006 was EUR43.8 million compared to same period in 2005 when net loss was EUR10.7 million, primarily as a result of aluminum price fluctuations, operational inefficiencies at certain North American and French operations, higher interest costs in the current period and negative foreign exchange impact.

Capital expenditures

Capital expenditures for the second quarter of 2006 were EUR11.0 million compared to EUR9.9 million during the same period of 2005.

Capital expenditures for the first half of 2006 were EUR17.8 million compared to EUR29.8 million during the same period of 2005. Such capital expenditures primarily relate to purchases of machinery and equipment by the Company's subsidiaries in the United States, Mexico and Europe.

Net Debt increased primarily to support working capital requirements and as a result of reduced operating performance

Net Debt at June 30, 2006, which includes EUR70.9 million in cash, increased by EUR32.3 million to EUR345.4 million from Net Debt of EUR313.1 million at December 31, 2005. The increase in Net Debt was primarily due to cash used to fund operations of EUR12.2 million, a negative working capital change of EUR4.5 million, cash used to fund the capital expenditure program for EUR17.4 million and debt issuance cost paid for EUR3.8 million, partially offset by a positive foreign exchange impact on Net Debt of EUR5.6 million.

Aluminum

Aluminum prices have continued to increase since December 2005. To minimize the effect of aluminum price fluctuations on our results, we are continuing to negotiate with our customers to amend existing sales contracts to shorten the time lag between the change in our cost of aluminum and the change in the price our customers pay to us for aluminum. To date, the majority of our customers have agreed to the proposed amendments. We are continuing to negotiate with two other customers to further decrease the time lag. Aluminum results have also been impacted by the negative spot-buy vs. contractual conditions, which has affected the first part of the quarter, pending the completion and the execution of the refinancing package previously announced.

China

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