Kaiser Blames Low Prices For Loss Company Posts $3.3 Million Loss For Fourth Quarter

Depressed aluminum prices continued to plague Kaiser Aluminum Corp., whose losses mounted in the final quarter of 1996, officials said Wednesday.

But the Houston-based manufacturer said losses will not affect construction this year of a new heat-treat facility adjacent to the Trentwood rolling mill, or renovation of the Mead smelter carbon bake operation, a project that is already under way. Together, the two projects are valued at more than $100 million.

Kaiser, which employs 2,600 people in Spokane, reported a net loss of $3.3 million, or 8 cents per share, on sales of $538.4 million for the fourth quarter ended Dec. 31.

The numbers could have been worse if not for a one-time $17 million benefit from a tax settlement. The provision was equal to 24 cents per share.

The quarterly results compared with a $21 million profit, or 26 cents per share, on sales of $591.1 million for the fourth quarter of 1995.

George Haymaker Jr., Kaiser’s chairman and chief executive officer, called the company results “unfavorable compared to those of the year-ago period.” He blamed the change on lower prices for alumina, primary aluminum and fabricated products the company produces as its facilities around the world.

Kaiser’s average price for primary aluminum in late 1996 was 66 cents per pound, down from 80 cents per pound a year earlier.

In addition, Haymaker said company results were negatively affected by high energy costs for the company’s alumina business and by maintenance expense during a scheduled shutdown in December at Trentwood.

For all of 1996, Kaiser reported net income of $8.2 million on sales of $2.19 billion, compared with net income of $60.3 million on sales of $2.24 billion in 1995.

As one of the world’s largest aluminum producers, Kaiser said it spent $20 million in research and development to achieve the start-up of Kaiser’s new micromill near Reno, Nev., in the fourth quarter, and other projects.

Company spokesman Bryan Oakley said Kaiser still plans this year to achieve $120 million in cost reductions, or profit enhancements, as previously announced. A plan to achieve this goal will be presented to Kaiser’s board in the future.

, DataTimes