Century reports first quarter 2015 financial results

Century Aluminum Company reported net income of $73.8 million ($0.76 per common share) for the first quarter of 2015. Results include $6.5 million ($0.07 per common share) for an unrealized gain on fair value of contingent consideration related to the acquisition of the remaining 50.3% interest of Mt. Holly and were negatively impacted by $1.6 million ($0.02 per common share) for signing bonuses related to a new labor agreement in Iceland and $1.0 million ($0.01 per common share) related to the separation of a former senior executive.

Sales for the first quarter of 2015 were $587.9 million compared with $420.8 million for the first quarter of 2014. Shipments of primary aluminum for the first quarter of 2015 were 245,258 tonnes compared with 206,785 tonnes shipped in the first quarter of 2014.

For the first quarter of 2014, Century reported a net loss of $20.1 million ($0.23 per common share). 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.

Net cash provided by operating activities in the first quarter of 2015 was $116.3 million as compared to a net use of cash of $10.7 million in the first quarter of 2014. During the first quarter of 2015, Century increased its share repurchase program authorization to $130 million and acquired 1.2 million shares of common stock for a total cost of $19.4 million.

"Our markets continue to be buffeted by several volatile forces," commented Michael Bless, President and CEO. "From a global macro perspective, a strong dollar pressures commodities and is especially punitive on U.S. producers. Specific to our sector, the trend in fundamentals remains generally positive. U.S. demand is strong and we see signs of growth, albeit from a low base, in Europe. In addition, supply outside of China remains well under control; there is a dearth of new projects and of any significant potential restarts. The wild card continues to be China. We are closely monitoring an improving smelting cost base, weakening domestic demand and a recent small relaxation in the export tariff regime. While the latter is on its face troubling, we do not see tangible harm unless further actions would be taken. We will continue to run the company on a reasonably cautious basis in light of fast changing market conditions."

Bless continued, "We are pleased with the company's performance during the quarter. Safety results were generally good. Management at Hawesville have done a very good job returning the plant to stability after the power modulations we endured last year. Operating metrics were favorable across the plants, and cash flow was strong. We reached a five year labor agreement with our unions at Grundartangi. Market power prices in the U.S. Midwest and Southeast remain attractive. In South Carolina, we have made progress toward structuring a post-2015 power contract that will support the operations of this excellent plant. Significant issues remain to be solved, but we are cautiously optimistic that a solution should be achievable."

"During the next several months we will cross milestones in several critical areas," concluded Bless. "We will reach, one way or another, the conclusion of the post-2015 power discussions in South Carolina. The same comment applies with regard to a power contract to enable the restart of Ravenswood; we should soon be in a position to finalize an acceptable structure or regrettably to conclude that such an outcome is not feasible. We remain steadfast in our determination to reopen this plant. We also hope to find a rational solution to the labor situation at Hawesville."