"We are pleased to report the successful completion of two important initiatives to improve our cost structure," Layle K. Smith, Noranda's President and Chief Executive Officer. "Specifically, we established a new and reduced electricity rate structure at our aluminum smelter and we completed our port expansion project in Jamaica. Collectively, we expect these initiatives will structurally reduce our cash costs, independent of fluctuations in aluminum prices, by $22 to $30 million per annum or $0.04 to $0.05 per pound of primary aluminum sold."
"The achievement of these key initiatives is part of our ongoing CORE (Cost-Out, Reliability and Effectiveness) program which provides Noranda a solid foundation from which to operate sustainably and grow through the aluminum cycle. Despite continued volatility in prices, we believe aluminum's long-term fundamentals remain positive. As we look forward, we remain focused on achieving operational excellence, making further improvements to our cost structure, and making accretive investments in our integrated platform."
First Quarter 2015 Highlights
• Total segment profit was $33.9 million versus $49.6 million in fourth quarter 2014 and $10.7 million in first quarter 2014
• Completed in April key productivity initiatives that structurally reduce Noranda's cash costs by $22 to $30 million per year
• Sales were $345.6 million in first quarter 2015, $336.2 million in fourth quarter 2014 and $311.6 million in first quarter 2014.
Sequentially (comparing first quarter 2015 to fourth quarter 2014) sales increased $9.4 million, or 2.8%, primarily driven by the seasonal recovery from fourth quarter customer de-stocking in Flat-Rolled Aluminum Products ("Flat-Rolled"). These positive effects were partially offset by sequentially lower prices in Alumina, Primary and Flat-Rolled.
Bauxite segment profit was $2.1 million in first quarter 2015, $6.3 million loss in fourth quarter 2014, and $2.5 million profit in first quarter 2014. Sequentially, Bauxite results primarily reflect the fact that fourth quarter 2014 results included the $8.4 million impact from our semi-annual internal bauxite transfer price adjustment between Bauxite and Alumina.
Alumina segment profit was $3.7 million in first quarter 2015, $17.1 million profit in fourth quarter 2014, and $11.9 million loss in first quarter 2014. Sequentially, the $13.4 million decrease in segment profit primarily results from the transfer price adjustment discussed above and the negative $3.8 million impact of lower alumina prices following the sequential decline in LME aluminum prices.
Primary segment profit was $23.1 million in first quarter 2015, $31.7 million in fourth quarter 2014, and $18.4 million in first quarter 2014. The sequential decline in Primary results reflects the negative impact of the decline in realized aluminum prices from fourth quarter 2014 to first quarter 2015.
