Noranda Aluminum reports second quarter 2015 results

Noranda Aluminum Holding Corporation today reported results for second quarter 2015 on July 23, 2015.

"In a volatile second quarter 2015 aluminum price environment, we successfully managed cash and available liquidity while continuing to focus on improving our operational reliability and implementing key productivity initiatives," said Layle K. "Kip" Smith, Noranda's President and Chief Executive Officer. "At a time when aluminum prices have declined sharply, maintaining cash and liquidity is a strategic priority. We believe our cash and available liquidity position supports our business as we execute our other strategic priorities."

"Our strategic priorities are to preserve cash and liquidity while reducing our costs by improving our operational reliability and implementing key productivity initiatives. During second quarter 2015, we began to realize savings from the port expansion in Jamaica and the new electricity rate structure in New Madrid. We secured $15 million of project-specific financing to complete the construction of a strategically important rod mill at New Madrid. We advanced a cost-saving project to reconfigure our bauxite unloading infrastructure in Gramercy, which we expect to complete in October 2015. We made key organizational changes as part of the ongoing program to address people, process, and equipment needs at our facilities, particularly in our upstream business. Our Flat-Rolled Products business continued to demonstrate outstanding results, meeting strong customer demand by optimizing production while driving out costs. Each of these developments is an integral part of reducing our cash costs. When fully implemented, we expect these cost reduction efforts to improve our performance so that we can generate positive free-cash flow with aluminum and key commodity input prices at current levels."

Highlights

• Fifth consecutive quarter of positive cash flow from operating activities and third consecutive quarter of greater cash flow from operating activities than prior year quarter.
• Cash and cash equivalents totaled $24.5 million and total available liquidity was $159.1 million as of June 30, 2015
• Excluding special items, EPS was a $0.25 loss versus a $0.08 loss in second quarter 2014; reported EPS was a $0.37 loss versus a $0.11 loss in the second quarter 2014
• Total segment profit was $19.4 million versus $33.9 million in first quarter 2015 and $30.4 million in second quarter 2014
• Excluding the additional levy payments made under the interim agreement with the Government of Jamaica (the "GOJ"), integrated primary aluminum net cash cost per pound ("Net Cash Cost") was $0.82 versus $0.83 in first quarter 2015 and $0.84 in second quarter 2014
• Key productivity initiatives completed in April 2015 included establishing a new and reduced electricity rate structure at our aluminum smelter and realizing the benefits related to our port expansion project in St. Ann which are estimated to reduce Noranda's cash costs by $22 to $30 million per year

Second Quarter 2015 Results

Sales were $332.7 million in second quarter 2015, $345.6 million in first quarter 2015 and $345.9 million in second quarter 2014. Total segment profit was $19.4 million in second quarter 2015, $33.9 million in first quarter 2015 and $30.4 million in second quarter 2014. Reported net loss was $25.4 million ($0.37 per share) in second quarter 2015 versus a $2.7 million loss in first quarter 2015 ($0.04 per share) and a $7.6 million loss in second quarter 2014 ($0.11 loss per share). Excluding special items, net loss was $17.2 million in second quarter 2015 ($0.25 per diluted share) versus a $1.9 million loss ($0.03 per share) in first quarter 2015 and a $5.6 million loss ($0.08 loss per share) in second quarter 2014.

Year-to-date 2015 Results

Sales were $678.3 million in the first six months of 2015 compared to $657.5 million in the first six months of 2014.

• The year-to-date sales increase of $20.8 million is primarily due to higher Midwest transaction price on average over the six months and higher external shipments at Alumina offset by lower external shipments at Primary.
• For the first six months of 2015, the average realized Midwest transaction price for aluminum products was $1.00 per pound, which was the combination of a $0.83 per pound LME aluminum price and a $0.17 per pound Midwest premium. This compares to an average price of $0.97 per pound for the first six months of 2014 ($0.83 per pound LME component and $0.14 per pound Midwest premium).

Total segment profit was $53.3 million in the first six months of 2015 compared to $41.1 million in the first six months of 2014.

• Segment profit increased $12.2 million primarily due to the higher Midwest transaction price and the $0.02 per pound decrease in Net Cash Cost per pound in the integrated upstream business.

Reported net loss was $28.1 million ($0.41 per share) in the first six months of 2015 versus a $24.4 million loss in the first six months of 2014 ($0.36 loss per share). Excluding special items, net loss was $18.4 million in the first six months of 2015 ($0.27 per share) versus a $22.0 million loss ($0.32 loss per share) in the first six months of 2014.