Century reports fourth quarter 2014 financial results

Century Aluminum Company reported net income of $61.8 million ($0.64 per common share) for the fourth quarter of 2014. Results were positively impacted by $6.9 million ($0.07 per common share) for purchase accounting related to the acquisition of the remaining 50.3% interest of Mt. Holly and negatively impacted by $5.0 million ($0.05 per common share) in non-cash, non-recurring pension charges and by $2.6 million ($0.03 per common share) related to the separation of former senior executives.

Sales for the fourth quarter of 2014 were $551.2 million compared with $401.2 million for the fourth quarter of 2013. Shipments of primary aluminum for the fourth quarter of 2014 were 226,082 tonnes compared with 216,755 tonnes shipped in the fourth quarter of 2013.

For the fourth quarter of 2013, Century reported a net loss of $9.7 million ($0.11 per common share). Cost of sales for the fourth quarter of 2013 included a benefit of $16.6 million related to deferred power contract liability amortization and $9.0 million for lower inventory costs. Results also included an $8.4 million charge related to the separation of our former chief executive officer.

For full year 2014, the company reported net income of $112.5 million ($1.16 per common share). Results were positively impacted by a benefit of $5.5 million related to power contract amortization, an unrealized gain of $1.4 million, primarily related to an LME-based contingent obligation and by $6.9 million for purchase accounting related to the acquisition of the remaining 50.3% interest of Mt. Holly. Results were negatively impacted by $5.0 million in non-cash, non-recurring pension charges, $3.6 million for litigation related items and by $2.6 million related to the separation of former senior executives.

Sales for the year ended December 31, 2014 were $1,931.0 million compared with $1,454.3 million for 2013. Shipments of primary aluminum for 2014 were 867,125 tonnes compared with 764,598 tonnes for 2013 period.

For 2013, Century reported a net loss of $40.3 million ($0.45 per common share). Results were positively impacted by a $31.0 million benefit for deferred power contract liability amortization, $2.2 million in litigation items and an unrealized gain of $16.8 million, primarily related to an LME-based contingent obligation. In addition, the company recorded a gain on bargain purchase of $5.3 million related to the Sebree acquisition. Results for 2013 were negatively impacted by relocation costs of $5.8 million, a loss on early extinguishment of debt of $3.3 million and an $8.4 million charge related to the separation of our former chief executive officer.

"The global macro environment continues to be buffeted by volatile and unpredictable forces," commented Michael Bless, President and Chief Executive Officer. "Myriad geopolitical developments continue to weigh on the price of risk assets, including base metals. In addition, the rapid decline in the value of crude and other major fossil fuels, while producing a meaningful reduction in the price of electric power, has further weighed on sentiment toward industrial commodities. Lastly, the uncertain pace of near-term economic activity in China continues to provide an overhang. All this said, trading conditions in our markets remain reasonably attractive. The fundamentals that should drive market conditions over the long-term, most specifically an attractive demand growth profile, remain firmly in place. It is thus incumbent on us to continue to manage our business on a balanced basis through the present uncertainties."

"We've had a productive last few months at Century," continued Mr. Bless. "In early December we completed the acquisition of the remaining interest in the Mt. Holly smelter. Having now had a closer look, we have confirmed our long-held opinion of the high quality of the management team and employees, and the production and management processes they employ. We are now focused on the significant transition activities, largely in the area of ERP and other systems, which must be completed during the balance of this year. In addition, our recently started value-added product lines at Sebree and Grundartangi are now producing at full capacity."

Mr. Bless concluded, "We have a lot on our plates over the next few months. We are redoubling our efforts on our key safety initiatives; safety performance, while adequate, has been far from the continuous improvement we demand. At Mt. Holly, we are very focused on achieving a post-2015 power arrangement that will support the operation of and investment in this plant over the long term. We will be conducting in-depth negotiations over labor contracts at both Hawesville and Grundartangi. Last, we hope to be nearing a solution for a power contract that will enable us to restart the Ravenswood smelter."