Century Aluminum Lifts Earnings as Smelter Restarts Boost Shipments
Second-quarter net sales climbed 15.9% sequentially to $752.1 million.
Century Aluminum (CENX), the aluminum producer, increased adjusted EBITDA attributable to the company 41.3% from the prior quarter to $326.9 million, supported by higher metal prices and improving production.
Shipments rose 6.3% sequentially to 130,632 tonnes as the Mt. Holly expansion and Grundartangi Line 2 restart added volume. The rebound reversed the first quarter’s 12.4% sequential shipment decline, while higher realized metal prices helped lift net sales $102.9 million from the prior period.
Compared with a year earlier, net sales rose 19.7% even as shipments fell 25.7%, reflecting stronger realized pricing and sales mix. Adjusted net income increased 50.7% sequentially to $257.3 million, and adjusted earnings rose to $2.46 a share from $1.63. GAAP net income declined 26.1% to $249.3 million, or $2.39 a diluted share, because the first quarter included a $287.9 million gain from the Hawesville sale.
Gross profit nearly doubled from the prior quarter to $227.9 million, expanding the gross margin to 30.3% from 18.3%. Favorable metal prices, sales mix, operating expenses and power prices outweighed higher raw-material costs. Emergency energy charges dropped to $0.2 million from $13.3 million after extreme winter weather pressured first-quarter power costs, though Mt. Holly expansion costs rose to $10.7 million.
Century completed the restart of Mt. Holly’s final 90 pots and returned Grundartangi Line 2 to near-full production during the quarter. The Grundartangi equipment-failure adjustment remained elevated at $61.3 million after tax, partly offset by $40.1 million of related insurance gains. Jamalco’s hurricane-related adjusted costs fell to zero, and its new TG4 power-generation turbine came online in August.
Century expects third-quarter adjusted EBITDA of $325 million to $345 million. The $335 million midpoint is $8.1 million above the second-quarter result and $10 million above the midpoint of its previous quarterly outlook.
Liquidity increased $173.9 million sequentially to $784.9 million, while cash rose to $343.4 million. Century also received a $94.3 million refund in July under the 45X manufacturing-credit program and cash exceeded total debt by the end of that month.