MONTEREY, CA--(Marketwire - February 21, 2013) - Century Aluminum Company (NASDAQ: CENX) reported a net loss of $6.9 million ($0.08 per basic and diluted common share) for the fourth quarter of 2012.
For the fourth quarter of 2011, the company reported a net loss of $31.1 million ($0.35 per basic and diluted common share). Financial results were positively impacted by an unrealized net gain on forward contracts of $2.4 million primarily related to the mark to market of aluminum price protection options. Cost of sales for the quarter included a $6.3 million charge for lower of cost or market inventory adjustments.
For 2012, the company reported a net loss of $35.6 million ($0.40 per basic and diluted common share). Financial results were negatively impacted by an unrealized net loss on forward contracts of $3.0 million primarily related to the mark to market of aluminum price protection options. Results were positively impacted by a net benefit of $4.1 million related to certain litigation items. Cost of sales included a $19.8 million benefit for lower of cost or market inventory adjustments.
For 2011, the company reported net income of $11.3 million ($0.11 per basic and diluted common share). Financial results were negatively impacted by a $7.7 million charge in the second quarter related to the contractual impact of changes in the company's Board of Directors and the executive management team, a charge of $2.9 million related to an insurance receivable, 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 results by $18.3 million with an associated discrete tax benefit of $4.2 million. An unrealized net gain on forward contracts, primarily related to the mark to market of aluminum price protection options, positively impacted results by $0.8 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 $19.8 million charge for lower of cost or market inventory adjustments.
Sales for the fourth quarter of 2012 were $317.7 million compared with $318.2 million for the fourth quarter of 2011. Shipments of primary aluminum for the 2012 fourth quarter were 162,303 tonnes compared with 155,649 tonnes shipped in the year-ago quarter. Sales for 2012 were $1,272.1 million compared with $1,356.4 million for 2011, and total 2012 primary aluminum shipments of 646,529 tonnes compared with 602,142 tonnes shipped in 2011.
"We are witnessing a modest improvement in general market conditions," commented Michael Bless, President and Chief Executive Officer. "The pace of economic activity in China appears to have at least stabilized, with signs of accelerating growth becoming more evident. Though industrial activity in the Euro zone remains depressed, the risk of a sovereign or banking crisis has eased. In the U.S., our key markets remain generally strong, with encouraging conditions in important sectors such as transportation. In this global context, the aluminum price has traded with less volatility in a relatively narrow band and regional premiums, based upon a number of factors, remain robust. Despite this reasonably benign environment, we remain watchful over potential disruptions which could be caused by political processes in the U.S. and in Europe, and continue to manage the Company with appropriate caution.
"We are pleased with our progress in 2012," continued Mr. Bless. "I am proud to report on behalf of my colleagues that we achieved, at each of our facilities, record safety performance last year; that said, we are directing the energy and resources required to achieve continuous improvement. Our operations have remained stable and each of our plants successfully reduced its cost base during the year. In addition, the team at Grundartangi has embarked on a high return, low risk program to increase the plant's capacity by 15 percent over the next several years. We have invested to support that growth and reduce Grundartangi's carbon costs through the acquisition of the former Zeeland Aluminum anode plant in the Netherlands.
"We are moving to take advantage of the transformation occurring in the U.S. electric power markets and believe the domestic primary aluminum industry should have a bright future in this environment. We have had good success thus far in benefiting from these profound changes. At Mt. Holly, we concluded an arrangement that allows us to take advantage of excess power available outside the region. In West Virginia, we have secured significant support for Ravenswood's power cost and are seeking to close the remaining gap that will allow us to reopen the plant, a goal to which we remain steadfastly committed. The political leadership of each of these states has taken an aggressive role in preserving this critical economic activity. We are now working hard in Kentucky to achieve the same result. Hawesville is an excellent plant with a first rate group of employees. With the appropriate market-based power arrangement, we are confident we will be able to operate and invest in the plant for years to come."
Fourth Quarter 2012 Earnings Conference Call
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.
About Century Aluminum
Century Aluminum Company supplies standard-grade, high-purity and value-added primary aluminum products to diverse downstream manufacturing customers in the aerospace, automotive and energy industries. The Company owns primary aluminum capacity in the U.S. and Iceland. Century's corporate offices are located in Monterey, Calif. Visit www.centuryaluminum.com for more information.
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.