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| Constellium |
Constellium, the leading France-based aluminium producer, has announced a significant drop in earnings for the third quarter of 2024. The company’s financial results were deeply affected by the flooding in Switzerland at the end of Q2, which impacted key operations in the Valais region. The company was forced to revise its full-year earnings outlook downward due to continued disruption at its facilities.
Q3 Earnings Fall Short of Expectations
In Q3 2024, Constellium reported an earnings before interest, taxes, depreciation, and amortisation (EBITDA) of €110 million ($119 million), a sharp decline of 35% compared to the same period last year. The company’s total revenue also dropped by 5%, amounting to €1.6 billion. Aluminium shipments were similarly affected, with a decrease of 5% year-on-year to 352,000 tonnes.
The Impact of the June Flooding in Valais
The flood that hit Constellium’s Swiss facilities in late June had lasting effects across several divisions. Particularly hard-hit were the aerospace and transportation sector, as well as automotive structures, which experienced steep declines in performance. The aerospace division saw its EBITDA drop by 41% to €47 million, while the automotive structures and industry division reported a 61% decrease in EBITDA to just €10 million.
Meanwhile, the packaging and automotive rolled products division experienced a more modest decline of 9%, with EBITDA falling to €61 million for the quarter. These disruptions from the flood, compounded by global demand challenges, contributed to the company’s overall performance slowdown.
Revised Full-Year Forecast Reflects Ongoing Struggles
Due to these challenges, Constellium has adjusted its full-year EBITDA forecast, lowering it to a range of €580-600 million, down from its previous estimate of €710 million. CEO Jean-Marc Germain emphasized that the company continues to face multiple hurdles, including weakening demand across various markets and the persistent impact of the Valais flood.
“Our team faced a challenging third quarter, with increased weakness in demand across several of our key markets. The ongoing effects of the June flooding have only exacerbated these challenges,” said Germain. “Along with macroeconomic and geopolitical uncertainties, the demand environment remains weak, and we anticipate this trend will continue in the near future.”
Outlook: Navigating Challenges and Looking Forward
Looking ahead, Constellium is focused on recovering from the flood’s impact while also adjusting to the changing global economic conditions. The company’s ability to rebound will depend on stabilizing demand across its core industries and fully restoring operations at its Swiss facilities.
With a weakened market environment and global uncertainties still at play, Constellium’s ability to meet its revised earnings forecast will be closely monitored by investors and analysts alike.
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