Century Aluminium reports an increase in Q2 primary aluminium shipments by 4% but a decline in net sales to $401.9 million

The United States-based primary aluminium producer Century Aluminium Company announced its second quarter results on Wednesday, August 5, mentioning an increase in primary aluminium shipments by 3.65 per cent quarter-on-quarter. According to the report, the shipments in Q2 2020 increased from 202,905 tonnes in Q1 to 210,309 tonnes. Net sales, however, reflected a downtrend from $421.2 million in Q1 to $401.9 million in Q2, primarily attributing to lower LME prices and regional premiums.

Century’s shipments from the United States were 130,645 tonnes in Q2 versus 129,114 tonnes in Q1, while its shipments from Iceland were 79,664 tonnes in comparison with 73,791 tonnes in Q1.

The company's sales in the United States decreased from $273.8 million in Q1 to $246.6 million in Q2, but that in Iceland increased from $141 million to $145.9 million.

Century reported that its net loss in Q2 came in at $26.9 million versus $2.7 million in Q1, while its net loss on an adjusted basis stood at $18.4 million compared to $1 million in the previous quarter.

Adjusted EBITDA for the second quarter of 2020 was $4.7 million, a decrease of $23.4 million driven by unfavourable LME and regional premium price realizations, although offset by lower raw material prices and lower operating expenses.

Michael Bless, President and CEO of Century Aluminium, commented: "We have maintained the measures we instituted in early March aimed at protecting the health of our employees and ensuring the continuity of our operations. The program has remained effective; all plants continue to run with minimal disruption. We have also maintained the stringent fiscal discipline we established several months ago, with exceptions for spending aimed at safety or sustainability. Most importantly, our people continue to dedicate themselves to their own safety and that of their colleagues."

Mr. Bless added, "Second quarter financial performance was consistent with our expectations. Cash flow was strong, and liquidity remains robust. In early July, we completed the refinancing of our only public debt issue; the new notes do not mature until 2025. Looking ahead, due to the normal lag in our price realization, third quarter reported financial performance will reflect the depressed commodity price environment that persisted throughout April and May. The metal price has since then improved meaningfully, consistent with the progress in a broad spectrum of manufacturing sectors and in the economy more generally; we are seeing evidence of these trends in regional and product premiums. That said, the U.S. delivered price remains depressed as the direct result of the surge of primary aluminum imports from Canada that began almost immediately after that country was exempted from the Section 232 tariffs in May 2019, breaching the clear commitment that was made; the re-imposition of the tariff remains the only method of regaining the effectiveness of the program."

Century's cash position at quarter end was $174.1 million, a sequential increase of $26.5 million.