Gränges sees increase in sales volume in Q3

Sweden-based Gränges, a leading supplier of rolled aluminum materials with operations in Europe, the Americas and Asia, has reported its financial results for the third quarter of 2024.

The company has posted a 6.7 percent increase in sales volume to 122,700 metric tons from 114,900 metric tons, while its net sales increased to 5,750 million Swedish krona ($541.4 million) from 5,575 Swedish krona (524.4 million) in the previous quarter.

Gränges' adjusted operating profit for the quarter totaled 420 million Swedish krona ($39.5 million), down from 439 million Swedish krona ($41.3 million) in the second quarter.

Profit for the period totaled 285 million Swedish krona ($26.8 million) a decrease from 332 Swedish krona ($31.3 million) in the previous quarter, and diluted earnings per share were 2.67 Swedish krona (25 cents), down from 3.12 (29 cents) in the previous quarter.

For the nine months from January through September, Gränges reports that its sales volumes increased by 5.6 percent to 375,500 metric tons from 355,500 metric tons for the comparable period in 2023, while its net sales decreased to 17,322 million Swedish krona ($1,631 million) from 17,551 million ($1,653 million). Its diluted earnings per share totaled 7.84 Swedish krona (74 cents), down from 8.47 (80 cents) the previous year.

Gränges total carbon emissions intensity (Scopes 1, 2 and 3) decreased from 8.4 metric tons to 7.4 metric tons of CO₂ equivalent per metric ton of aluminum, while the company's use of recycled aluminum increased to 46.5 percent from 41 percent for the first nine months of 2023.

“In the third quarter, we saw good demand in HVAC, speciality packaging and other niches, markets which last year were affected by excess inventory," Gränges’ CEO Jörgen Rosengren says. "On the other hand, demand from automotive customers weakened noticeably after the summer. Against that background, we are happy to see that the stronger sales focus we have had since 2023 continued to drive growth. We increased our share in all markets, boosting our year-over-year sales volume growth to 7 percent."

He adds that Gränges countered customer price pressure with cost productivity and improved metal management.

“Cash flow remained strong in the quarter, despite the ongoing capacity expansion projects which we intend to finalize toward the end of this year,” Rosengren says. “The good cash flow reduced our net debt. Our financial leverage improved and remained well within our target range. Taken together, this creates stability and flexibility to finance further growth.”

He says the company’s focus on sustainability continued to produce positive results.

“Carbon intensity remained ahead of our 2025 climate goals thanks to record-high recycling," he continues. "Circularity is also a strategic objective on its own. Together with customers, suppliers and the broader industry, we’re working on further opportunities. For instance, we recently joined the First Movers Coalition, a group of leading companies committed to decarbonize hard-to-abate sectors.”

Additionally, Gränges announced Oct. 25 the completion of its transaction to acquire a cost-efficient casting and hot-rolling facility in the Shandong province of China. The company first signed an agreement to purchase the site May 31. As a result of the transaction, Gränges also gains access to scalable downstream capabilities and supply of low-carbon aluminum. In return, SIG obtains 20 percent of the outstanding shares in Gränges’ subsidiary in China.

The transaction will lead to nonrecurring costs of approximately 30 million Swedish krona ($2.8 million) in the fourth quarter. The new production facility is expected to contribute positively to the company’s sales volume in the fourth quarter at an approximately breakeven adjusted operating profit. In 2025, the transaction is expected to contribute marginally to Gränges’ earnings per share after minority interests, the company says.

While Rosengren says market demand remains hard to predict, with apparent weakness in automotive being partly offset by recovery in other markets, the company expects a high-single-digit percentage sales volume growth in the fourth quarter compared with 2023.

“This excludes any potential effects from the acquisition of the production facility in China," he adds. "We aim to continue to offset price pressure and wage inflation with cost reduction and productivity improvement but expect currency exchange rates to be unfavorable compared to the fourth quarter last year.”