PITTSBURGH--(BUSINESS WIRE)--Arconic Corp. (NYSE: ARNC) today provided a business update regarding the impact of the COVID-19 pandemic on its business and operations as well as certain preliminary unaudited financial information for the quarter ended March 31, 2020.

COVID-19 Updates

Chief Executive Officer Tim Myers said, “In the few short weeks since Arconic’s launch as a standalone company, market conditions have been changing rapidly and unpredictably. Notwithstanding that, we believe that Arconic’s diverse end markets and geographic composition mitigate the impact on the Company from any singular area of decline. Furthermore, despite the challenges that we currently face in North America and Europe, we are seeing positive momentum at our Chinese facilities that felt the full brunt of the COVID-19 pandemic in early 2020 and are now back to essentially normal production. Our Russian packaging facility is running at full operations due to strong end market demand. Moreover, our operating footprint benefits from a highly variable cost structure and we are actively managing operations to effectively flex activity to respond to changing automotive and aerospace market conditions. As previously announced, in response to market conditions we took a series of proactive actions to mitigate the impacts of the pandemic on our business. By our current estimates, we expect these cost savings to improve our financial profile by approximately $200 million.” Mr. Myers further added, “As an update, we resumed operations at our New York facility on April 20th and we expect to ramp back up our operations at our Tennessee facility this week, where we remain excited by the opportunities for growth and the enhanced capabilities that are nearing completion.” Mr. Myers concluded, “We are pleased with the recent announcement on April 22nd by the ITC initiating antidumping and countervailing duties trade case against 18 countries on common alloy sheet products and we expect this will benefit our operations and others in industrial aluminum processing.”

Chief Financial Officer Erick Asmussen added, “Our liquidity and financial position remains strong despite the pandemic’s impact to our business. We have in excess of a billion dollars of available liquidity today (inclusive of approximately $500 million of cash on the balance sheet at the time of our separation) and our current capital structure maturities are well into the future.” Mr. Asmussen further expanded, “Our business is flexible and cash requirements are countercyclical and we expect working capital will be a source of cash in the near team, and together with the benefit of the recent management actions to reduce costs, we believe we have adequate liquidity to operate the Company in spite of ongoing uncertainties.”

Preliminary First Quarter Results

On April 14, 2020, Arconic’s parent company prior to the April 1, 2020 separation, Howmet Aerospace Inc. (“Howmet”), reported preliminary unaudited financial results for the quarter ended March 31, 2020, including certain financial information related to its former Global Rolled Products (“GRP”) segment, the underlying businesses that now comprise Arconic.

On the basis of that information, for the quarter ended March 31, 2020 we expect to report for the quarter:

• Revenue of approximately $1.6 billion, which is down approximately 12% year-over-year, with organic revenue expected to be down approximately 7% due to disruptions in the automotive, commercial transportation and aerospace markets driven by COVID-19 and 737 MAX production declines somewhat offset by growth in the industrial market;
• Segment operating profit to be approximately $170 million, which is up approximately 26% year-over-year, driven by net cost reductions and favorable aluminum prices, partially offset by volume declines;
• Segment operating profit margin to increase approximately 310 basis points year-over-year to approximately 10.7%; and
• Depreciation and amortization to be approximately $55 million in the first quarter 2020.

Separately, as previously disclosed, Arconic expects its corporate costs to be in the range of $75 million to $85 million on an annual run rate basis beginning April 1, 2020, the date of the separation, which includes approximately $20 million of depreciation and amortization.

The financial information of Howmet’s GRP segment included in this Form 8-K is the information of Howmet’s GRP segment as a reportable segment of Howmet. This preliminary unaudited combined financial information for the quarter ended March 31, 2020 may differ from the final Howmet GRP segment’s unaudited financial results as well as the unaudited combined financial results to be reported by Arconic in its Quarterly Report for the period ended March 31, 2020. Undue reliance should not be placed on this unaudited financial information.

About Arconic Corporation

Arconic Corporation (NYSE: ARNC), headquartered in Pittsburgh, Pennsylvania, is a leading provider of aluminum sheet, plate and extrusions, as well as innovative architectural products, that advance the ground transportation, aerospace, industrial, packaging and building and construction markets. For more information, visit www.arconic.com.