Century reports first quarter 2014 financial results

Century Aluminum Company reported a net loss of $20.1 million ($0.23 per basic and diluted common share) for the first quarter of 2014. Cost of sales for the quarter included a benefit of $5.5 million related to deferred power contract liability amortization. Results were negatively impacted by a $3.1 million charge for increased legal reserves.

For the first quarter of 2013, the company reported net income of $8.3 million ($0.09 per basic and diluted common share). Financial results were positively impacted by a litigation reserve adjustment of $2.2 million and an unrealized gain of $15.7 million related to a LME-based contingent obligation. Results were negatively impacted by severance and other expenses of $2.2 million related to our corporate headquarters relocation. Cost of sales for the quarter included a $5.8 million charge related to lower of cost or market inventory adjustments.

Sales for the first quarter of 2014 were $420.8 million compared with $321.3 million for the first quarter of 2013. Shipments of primary aluminum for the first quarter of 2014 were 206,785 tonnes (which includes 50,631 tonnes from the Sebree operation acquired June 1, 2013), compared with 158,776 tonnes shipped in the first quarter of 2013.

"We have seen continuing progress in fundamental industry conditions," commented Michael Bless, President and Chief Executive Officer. "Demand development in key end markets in the U.S. and in Europe is supportive of premiums for our value-added products. These conditions are backstopped by reasonable economic growth and job creation in these regions. However, risks remain in the form of geopolitical tensions in Central Europe and the uncertain trajectory of China's economy and capital and credit markets. While on balance we see an improving environment, we will continue to manage the company, with a measure of caution until we develop higher confidence."

"We are moving forward with our critical initiatives," continued Mr. Bless. "Safety performance was good during the quarter; more importantly, we are seeing positive developments in terms of the significant forward-looking safety indicators. After a very difficult first quarter due to the historic cold weather in the midwestern and eastern U.S., power prices are now exhibiting a more rational reference to underlying fundamentals. We believe that this improved power price outlook, coupled with the other improvements we have made in the Kentucky plants, including continuing non-power cost structure reductions and enrichments in the product mix, should produce attractive returns going forward. In South Carolina, we continue to search for a competitive post-2015 power arrangement for Mt. Holly; we are committed to finding a solution to support the long-term operation of this excellent plant."