Century Aluminum reports turnaround performance in Q2 2017 on higher aluminium prices

Century Aluminum Company reported a net income of $7.1 million for Q2 2017 in comparison to a net loss of $15.1 million for Q1 2017.  Results were driven by a $6.1 million unrealized gain relating to LME forward sales.  Adjusted net income for Q2 was $0.8 million compared to an adjusted net loss of $5.0 million for Q1 2017. The positive results were a reflection of improved aluminium prices and positive market sentiments in the U.S. 

The adjusted net income was $0.8 million compared to an adjusted net loss of $5.0 million Q1 2017. Century also reported adjusted EBITDA of $34.0 million, up $11.8 million from Q1 2017.  The increase was driven by higher aluminium prices, slightly offset by higher alumina prices.

Commenting on the results, Michael Bless, President and Chief Executive Officer said,

"Profit conversion on higher revenue was strong despite the predicted increase in alumina costs caused by our pricing mechanisms and inventory costing method; alumina unit costs will decrease in the third quarter.  In contrast, we are seeing an increase in the prices of other key raw materials, and we expect this trend to continue for some time."

Total sales also increased to $388.8 million compared with $365.8 million in Q1 2017.  Shipments of primary aluminium stood at 182,829 tonnes compared with 186,395 tonnes in Q1 2017. The company reported a net cash of $14.4 million in Q2 and a cash position of $130.7 million at quarter end.

Bless projects a global supply surplus for the aluminium industry for the rest of the year  due to China’s random production.  Despite the closing announcement, he is concerned about the continuation of heavy aluminium product export by China.

"General manufacturing and construction activity remains relatively robust in our markets, as does demand for our products.  However, we continue to expect a global supply surplus in primary aluminum for the foreseeable future, produced by China's still surging and heavily subsidized uneconomic production.  While recent closure announcements, if implemented, could portend a more economically justified approach, the trade data continue to show record exports of aluminum products from that country," Bless concluded.