MONTEREY, CA--(Marketwire - October 25, 2011) - Century Aluminum Company (NASDAQ: CENX) reported a net loss of $6.6 million ($0.07 per basic and diluted share) for the third quarter of 2011. Financial results were positively impacted by a mark-to-market gain on forward contracts of $4.2 million related primarily to aluminum put options. Cost of sales for the quarter included a $13.5 million charge for lower of cost or market inventory adjustments.
In the third quarter of 2010, the company reported a net loss of $16.8 million ($0.18 per basic and diluted share). Reported results were negatively impacted by a mark-to-market loss on forward contracts of $12.1 million related primarily to aluminum put options and positively impacted by a $1.4 million tax benefit related to the release of tax reserves no longer required. Cost of sales for the quarter included a $15.8 million charge for the portion of power costs at Hawesville payable by the previous power supplier per the terms of the power agreements and a $7.3 million benefit for lower of cost or market inventory adjustments.
Sales in the third quarter of 2011 were $345.6 million, compared with $279.2 million in the third quarter of 2010. Shipments of primary aluminum for the quarter totaled 150,832 tonnes compared with 147,216 tonnes in the year-ago quarter.
For the first nine months of 2011, the company reported net income of $42.4 million ($0.42 per basic and diluted share). These results were negatively impacted by a $7.7 million charge related to the contractual impact of the recent changes in the Company's Board of Directors and the executive management team; a charge of $2.9 million related to an insurance receivable; a loss on forward contracts of $2.3 million, related primarily to the marking to market of aluminum put options; and a charge of $0.8 million related to the early retirement of debt. Changes to the Century of West Virginia retiree medical benefits program increased nine month results by $18.3 million with an associated discrete tax benefit of $4.2 million. Cost of sales included an $8.6 million charge related to the restart of a curtailed potline at the Hawesville, KY smelter and a $13.5 million charge for lower of cost or market inventory adjustments. For the first nine months of 2010, the company reported a net loss of $5.3 million ($0.06 per basic and diluted share). Prior year results were negatively impacted by a mark-to-market loss on forward contracts of $4.8 million related primarily to aluminum put options. Cost of sales for the 2010 nine month period included a $47.3 million charge for the portion of power costs at Hawesville payable by the previous power supplier per the terms of the power agreements and a $0.3 million benefit for lower of cost or market inventory adjustments.
Sales in the first nine months of 2011 were $1,038.3 million compared with $852.4 million in the same period of 2010. Shipments of primary aluminum for the first nine months of 2011 were 446,493 tonnes compared with 436,472 tonnes for the comparable 2010 period.
"The events of the last two months, and their impact on our industry, remind us all of the volatility of the world in which we live," commented Logan W. Kruger, President and Chief Executive Officer. "Clearly, the risk remains that the significant problems facing sovereigns and financial institutions could more substantially influence economic conditions in both developed and emerging economies. That said, we continue to see reasonably good business conditions in our markets. The relative difficulty in obtaining supplies of near-term metal, driven by a number of factors, continues to support attractive premiums in most regions. While the commodity price has fallen, it is supported by the rising cost of production being experienced by all industry participants.
"During the quarter, we continued on a steady pace to return the Hawesville smelter to stable operations," added Mr. Kruger. "We expect these efforts will produce improvement in production and shipments in the fourth quarter. Grundartangi's performance has been excellent, with record production and strong safety results and operating efficiencies. All of our businesses continue to manage through the increases we are seeing in the costs of electric power and raw materials, specifically carbon. Lastly, discussions continued in several key areas of the Helguvik project, and we are awaiting a decision from the arbitration panel regarding our contractual dispute with one of the power suppliers."
Century Aluminum Company owns primary aluminum capacity in the United States and Iceland. 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.
Certified Advisors for the First North market of the OMX Nordic Exchange Iceland hf. for Global Depositary Receipts in Iceland:
Atli B. Gudmundsson, Senior Manager -- Corporate Finance, NBI hf.
Steingrimur Helgason, Director -- Corporate Finance, NBI hf.
Cautionary Statement
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements about future, not past, events and involve certain important risks and uncertainties, any of which could cause our actual results to differ materially from those expressed in our forward-looking statements, including, without limitation, declines in aluminum prices or increases in our operating costs; deterioration of global or local financial and economic conditions; increases in global aluminum inventories and the addition of additional global aluminum production capacity; additional delays in the completion of our Helguvik, Iceland smelter, including delays or other changes in our ability to secure a reliable power supply; and our ability to successfully manage and/or improve performance at each of our operating smelters. Forward-looking statements in this press release include, without limitation, statements regarding future market and economic conditions, including the continuance of supply and cost trends in the aluminum market, our ability to successfully remedy production issues at our Hawesville facility and improve its production and shipment levels; and the ultimate outcome of our arbitration with one of the power suppliers to our Helguvik facility. More information about the risks, uncertainties and assumptions affecting the Company can be found in the risk factors and forward-looking statements cautionary language contained in our Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. We do not undertake, and specifically disclaim, any obligation to revise any forward-looking statements to reflect the occurrence of future events or circumstances.
Contacts:
Mike Dildine (media)
831-642-9364
Shelly Harrison (investors)
831-642-9357
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