MONTEREY, CA--(Marketwire - February 15, 2011) - Century Aluminum Company (NASDAQ: CENX) reported net income of $65.3 million ($0.65 per basic and $0.64 per diluted common share) for the fourth quarter of 2010. Financial results were negatively impacted by a mark-to-market loss on forward contracts of $5.7 million primarily related to LME price protection options and by a contractual termination pension benefit charge of $4.6 million due to the continued curtailment of the Ravenswood facility. Changes to the Century of West Virginia retiree medical benefits program increased current quarter results by $56.7 million with an associated discrete tax benefit of $2.0 million. Cost of sales for the quarter includes a $15.9 million net after-tax charge for the portion of power costs at Hawesville payable by the previous power supplier per the terms of the power agreements.
For the fourth quarter of 2009, Century reported a net loss of $24.4 million ($0.28 per basic and diluted common share). Financial results were negatively impacted by net after-tax expense of $11.5 million related to the purchase of downside aluminum price protection for a portion of Century's U.S. production through 2010, and a net after-tax charge of $5.3 million for losses on early extinguishment and modification of debt. Financial results were positively impacted by a $6.6 million benefit related to discrete income tax adjustments. Cost of sales for the fourth quarter of 2009 included a $17.2 million net after-tax charge for the portion of power costs at Hawesville payable by the previous power supplier per the terms of the power agreements.
For 2010, the company reported net income of $60.0 million ($0.59 per basic and diluted common share). These results were negatively impacted by a mark-to-market loss on forward contracts of $10.5 million primarily related to LME price protection options and by a contractual termination pension benefit charge of $4.6 million due to the continued curtailment of the Ravenswood facility. Changes to the Century of West Virginia retiree medical benefits program increased results by $56.7 million with an associated discrete tax benefit of $2.0 million. Tax benefits related to the release of tax reserves no longer required positively impacted results by $2.1 million for the year. Cost of sales for the year includes a $63.2 million net after-tax charge for the portion of power costs at Hawesville payable by the previous power supplier per the terms of the power agreements.
For 2009, the company reported a net loss of $206.0 million ($2.73 per basic and diluted common share). These results were negatively impacted by several items, including: a net after-tax charge of $41.7 million for costs associated with production curtailments at U.S. smelters; a $73.2 million net after-tax impairment charge associated with the divestiture of our alumina and bauxite investments; a net after-tax charge of $11.0 million related to the purchase of downside aluminum price protection for a portion of our U.S. production through 2010; and a net after-tax charge of $4.7 million for losses on early extinguishment and modification of debt. 2009 results were positively impacted by a net after-tax benefit of $57.8 million, primarily from realized and unrealized gains related to the termination of the existing power contract and its replacement with a new power contract at Hawesville and a $14.3 million benefit related to discrete income tax adjustments. Net after-tax inventory lower of cost or market adjustments of $33.6 million favorably impacted the yearly results. Cost of sales for 2009 included a $31.6 million net after-tax charge for the portion of power costs at Hawesville payable by the previous power supplier per the terms of the power agreements.
Sales for the fourth quarter of 2010 were $316.9 million compared with $256.8 million for the fourth quarter of 2009. Shipments of primary aluminum for the 2010 fourth quarter were 148,923 tonnes, compared with 147,700 tonnes shipped in the year-ago quarter. Sales for 2010 were $1,169 million compared with $899 million for 2009, and total 2010 primary aluminum shipments of 585,395 tonnes compared with 605,126 tonnes shipped in 2009.
"Global economic growth has improved over the last several quarters, with business increasing across most end-markets," commented Logan W. Kruger, President and Chief Executive Officer. "In China, consumer activity and industrial production have reaccelerated since last spring despite a variety of government actions to control inflationary pressures. Other developing regions also remain buoyant, although inflation is a developing trend in these regions as well. On the other hand, certain large markets, such as construction, remain historically weak in the U.S. and Europe. Aluminum inventories continue to be high, a situation that may be exacerbated by new and restarted capacity expected to come on-line over the next several months. In summary, we believe the risks of the current market environment are reasonably balanced; it is in this context that we are managing the company."
"We are pleased with Century's progress during the closing months of 2010 and the beginning of 2011," continued Mr. Kruger. "At Hawesville, we have concluded a new five-year labor agreement and are ahead of plans to restart the potline that was curtailed during the financial crisis. We are continuing to advance the complex process required for a potential restart of the Ravenswood smelter. We have built strong liquidity and reduced structural costs as well as long-term obligations. These accomplishments should help to protect the company during periods of volatility that inevitably occur in commodities markets and provide the underpinnings to grow the company in a deliberate manner. Toward this end, we are working on high-return, low-risk growth programs at Grundartangi and Hawesville and we continue to make progress toward what we cautiously expect will be a restart of major construction activity at Helguvik this year."
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 and comments made by Century management on the quarterly conference call contain "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. Such risks and uncertainties may include, without limitation, declines in aluminum prices or increases in our operating costs; increasing inflation or other worsening of global financial and economic conditions; increases in global aluminum inventories and the addition of new or restarted global aluminum production capacity; additional delays in the completion of our Helguvik, Iceland smelter; our ability to successfully progress the potential restart of our Ravenswood smelter and implement growth programs at Grundartangi and Hawesville; and our ability to successfully implement measures to protect Century during economic down cycles. More information about these risks, uncertainties and assumptions 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 Lair (investors)
831-642-9357
