Higher automotive structure shipments
In the previous part of this series, we saw how Constellium’s (CSTM) auto body sheets shipments increased by 82% over the previous year. Along with auto body sheets, Constellium N.V. (CSTM) also supplies other structural components to automobile companies. These include crash management systems, bumpers, car floors, and so on. Let’s now see how this segment has performed in 3Q14.
Shipments increase by 11%
The previous chart shows the 3Q14 results of Constellium’s Automotive Structures and Industry (or AS&I). As you can see, the shipments increased by 11% over 3Q13. The adjusted earnings before interest, taxes, depreciation, and amortization (or EBITDA) also increased by 12% over last year.
The EBITDA per ton, though, decreased by 4% over last year. This was largely due to the negative impact of aluminum premiums. The increase in aluminum premiums negatively impacted the third-quarter earnings of the AS&I segment by 3 million Euros.
A look at Constellium’s competitors
As discussed previously, rising aluminum premiums negatively impact the profitability of Constellium (CSTM). On the other hand, primary aluminum producers such as Rio Tinto (RIO), Alcoa (AA), and Century Aluminum (CENX) actually benefit from the higher premiums. Most of these companies have posted higher 3Q earnings, largely due to rising aluminum premiums. In fact, Century Aluminum is planning to shift to a new pricing mechanism to take advantage of the aluminum premiums. Currently, Century Aluminum is a top holding of the Standard and Poors depositary receipt (or SPDR) S&P Metals and Mining exchange-traded fund (or ETF) (XME).
Until now, we have analyzed the 3Q14 results of Constellium (CSTM). We have also seen the various negative events that are expected to impact its future profitability. We will now look at some other factors that can impact Constellium’s future earnings.