MONTEREY, CA--(Marketwire - July 24, 2008) - Century Aluminum Company (NASDAQ:
CENX) reported a net loss of $2.3 million ($0.06 per basic and diluted share)
for the second quarter of 2008. Reported second quarter results were negatively
impacted by an after-tax charge of $129.9 million ($3.16 per basic share) for
mark-to-market adjustments on forward contracts that do not qualify for cash
flow hedge accounting. Quarterly results were positively impacted by a $15.5
million tax benefit ($0.38 per basic share) resulting principally from a
reduction in non-U.S. corporate tax rates. The dilutive effect of the
convertible notes, options and service-based awards would reduce basic EPS by
$0.21. Cash used to settle forward contracts that do not qualify for cash flow
hedge accounting was $62.8 million.
In the second quarter of 2007, the company reported a net loss of $60.7 million
($1.77 per basic and diluted share), which included an after-tax charge of
$125.1 million ($3.66 per basic share) for mark-to-market adjustments on
forward contracts that do not qualify for cash flow hedge accounting and a
non-cash after-tax charge of $2.0 million ($0.06 per basic share) for the early
extinguishment of debt. Quarterly results were positively impacted by a tax
benefit of $4.3 million ($0.13 per basic share) related to the increase in the
carrying amount of deferred tax assets as a result of a state tax law change.
The dilutive effect of the convertible notes, options and service-based awards
would reduce basic EPS by $0.13. Cash used to settle forward contracts that do
not qualify for cash flow hedge accounting was $27.8 million.
Recent highlights included:
-- Net sales of $545 million increased 16 percent from record levels set
in the first quarter of 2008.
-- Construction continued at the company's greenfield smelter project at
Helguvik, Iceland, where first metal production is expected by year-end
2010. A groundbreaking ceremony in June celebrated the commencement of
major construction activity.
-- After a successful conceptual study, Century and Minmetals have
commissioned a full feasibility study for a bauxite and alumina joint
venture project in Jamaica. The study is scheduled to be completed by the
end of 2009.
-- In early July, Century settled all of its remaining fixed price
forward aluminum financial sales contracts. The transaction was partially
financed with a public stock offering of 7,475,000 shares of common stock
(including an over-allotment option of 975,000 shares) at $62.25 per share.
Sales in the second quarter of 2008 were $545.2 million, compared with $464.0
million in the second quarter of 2007. Shipments of primary aluminum for the
quarter totaled 198,172 tonnes compared with 188,650 tonnes in the year-ago
quarter, reflecting the impact of the Grundartangi expansion to 260,000 tonnes,
which was completed in the fourth quarter of 2007.
For the first half of 2008 the company reported a net loss of $235.1 million
($5.72 per basic and diluted share), which includes an after-tax charge of
$415.8 million ($10.12 per basic share) for mark-to-market adjustments on
forward contracts that do not qualify for cash flow hedge accounting. The
dilutive effect of the convertible notes, options and performance shares would
reduce basic EPS for the first half of 2008 by $0.30 per share. Cash used to
settle forward contracts that do not qualify for cash flow hedge accounting was
$115.0 million. This result compares with net income of $3.6 million ($0.11 per
basic and $0.10 per diluted share) in the year-ago period, which included an
after-tax charge of $125.1 million ($3.75 per basic share) for mark-to-market
adjustments on forward contracts that do not qualify for cash flow hedge
accounting. The dilutive effect of the convertible notes, options and
service-based awards would reduce basic EPS for the first half of 2007 by $0.24
per share. During the first half of 2007, cash used to settle forward contracts
that do not qualify for cash flow hedge accounting was $54.9 million.
Sales in the first six months of 2008 were $1,016.3 million compared with
$911.7 million in the same period of 2007. Shipments of primary aluminum for
the first six months of 2008 were 397,894 tonnes compared with 373,272 tonnes
for the comparable 2007 period.
"Century made important progress during the quarter," said president and chief
executive officer Logan W. Kruger. "The unwind of our entire aluminum hedge
book provides our investors with full exposure to the commodity. We continue to
believe firmly that metal markets, while volatile, will demonstrate long-term
upward pressure consistent with ongoing cost increases and supply constraints,
as well as increasing metal demand from emerging economies. Construction is
accelerating at the Helguvik greenfield site and we expect to begin pouring
concrete by the fourth quarter of this year. Finally, the Century-Minmetals
Jamaican bauxite and alumina joint venture project has moved into a full
feasibility study which, if successful, could result in a project decision by
the end of 2009."
Century Aluminum Company owns primary aluminum capacity in the United States
and Iceland, as well as an interest in alumina and bauxite assets in the United
States and Jamaica. Century's corporate offices are located in Monterey,
California.
Century Aluminum's quarterly conference call is scheduled for 5:00 p.m. Eastern
time today. To listen to the conference call and to view related presentation
materials, go to www.centuryaluminum.com and click on the conference call link
on the homepage.
Cautionary Statement
This press release may contain "forward-looking statements" within the meaning
of U.S. federal securities laws. The company has based its forward-looking
statements on current expectations and projections about the future; however,
these statements are subject to risks, uncertainties and assumptions, any of
which could cause the company's actual results to differ materially from those
expressed in its forward-looking statements. More information about these
risks, uncertainties and assumptions can be found in the risk factors and
forward-looking statements cautionary language contained in the company's
Annual Report on Form 10-K and in other filings made with the Securities and
Exchange Commission. The company does not undertake, and specifically
disclaims, any obligation to revise any forward-looking statements to reflect
the occurrence of anticipated or unanticipated events or circumstances after
the date such forward-looking statements are made.
Certified Advisors for the First North market of the OMX Nordic Exchange
Iceland hf. for Global Depositary Receipts in Iceland:
Helga Gunnarsdottir, Director-Corporate Finance, Landsbanki Islands hf.
Olafur Finsen, Senior Legal Advisor-Corporate Finance, Landsbanki Islands hf.
