American aluminium smelter Century Aluminum released results for the second quarter of 2019 on Thursday. Though shipments and sales fell in the quarter, the firm’s bottom line began to claw back toward the black thanks to a drop in alumina and power prices.
The second quarter saw shipments drop by 1 percent, from 206,451 metric tons to 203,380 metric tons due to timing of deliveries. Net sales were off by 3 percent, falling from US$490 million in the first quarter to US$473.1 million in the just-ended quarter. Century accounts for the drop by pointing out a corresponding fall in aluminium prices at the London Metal Exchange.
Century’s net loss in the quarter came to US$20.7 million, improving upon the prior quarter’s net loss of US$34.6 million thanks to US$2.8 million in insurance proceeds from the equipment failure at Sebree and US$6.2 million in unrealized gain on derivative investments. However, US$4.5 million in exceptional items, US$9 million lower of cost or net realizable value inventory adjustment, and a US$4.3 million loss on the sale of our BHH investment prevented further improvements in the quarter.
In the second quarter Century reported an adjusted net loss of US$16.2 million, better than the prior quarter’s adjusted net loss of US$66.6 million, while adjusted EBITDA reversed from a first-quarter loss of US$44.1 million to a second-quarter gain of US$11.7 million.
“Market conditions remain dynamic,” explained Century’s President and CEO Michael Bless.
“Demand for aluminum products in the U.S. continues to be robust. China remains the swing factor in global demand, and market participants are carefully assessing the balance of primary aluminum demand and supply. Thus far, indications globally continue to be generally favorable, with inventories falling to historically low levels. The alumina price, as expected, has fallen to a level we believe to be in the range of historical fair value.”
“The Company’s operations are stable and we are on track on our various initiatives,” Bless continued. “The rebuild program at Hawesville remains on schedule and budget; we look forward to returning the plant to its full production capacity in 2020. Sebree continues to execute well on its casthouse expansion program. We signed an agreement to sell our interest in the anode plant in China and received the first half of the cash purchase price. With the completion of the second baking furnace at our anode plant in the Netherlands, we now have an essentially new carbon plant, with best-in-class efficiencies and environmental systems, in a strategically valuable location that supplies substantially all of our requirements at Grundartangi.”