American aluminium smelter Century Aluminum released production and financial results for the year’s opening quarter earlier this week. Though production was up in the quarter, wider market forces helped keep financial numbers lower than hoped.
In the first quarter Century Aluminum shipped 206,451 metric tons of aluminium, up 4 percent from last quarter’s total of 199,466 metric tons. A restart of operations at the Hawesville smelter helped push shipments higher in the quarter.
Net sales in the quarter totaled US$490.0 million, a 1-percent increase on the quarter from Q4’s total sales of US$486.9 million.
Century Aluminum posted a net loss in the quarter of US$34.6 million, an improvement over last year’s net loss of US$65.0 million. The firm says US$32.0 million of exceptional items helped blunt the losses, including US$35.0 million lower of cost or net realizable value inventory adjustment in the quarter.
Adjusted net income for the quarter totaled US$66.6 million, a drop on the quarter from last quarter’s net loss of US$40.7 million.
Century’s adjusted EBITDA for Q1 totaled a loss of US$44.1 million, falling US$26.0 million from the prior quarter’s adjusted EBITDA loss of US$18.1 million. The drop off was the result of an unprecedented fall in alumina prices relative to those of raw aluminium, said the firm. Lower prices at the LME and lower regional premiums also contributed to bottom-line struggles in Q1.
Michael A. Bless, Century’s President and Chief Executive Officer, expressed optimism that market forces affecting his firm’s bottom line are beginning to relent.
“We continue to manage through a dynamic environment. Actual trading conditions have remained for the most part favorable. Demand growth has continued to be generally strong. The metal price has been rangebound, perhaps pending development on several significant geopolitical fronts. Importantly, the alumina price has, as we expected, fallen significantly from its highs, but still has a ways to go to reach historical levels. Our analysis indicates the market is very well supplied at present; new production expected to come online in 2019 as well as potential restarts in the Atlantic basin should put significant further downward pressure on the index price.”
“We have continued to execute our plan of growth and cost structure improvement,” Bless continued. “As planned, all three curtailed potlines at Hawesville were in full operation during the first quarter; the project also remains on budget. The team are now turning their attention to rebuilding and installing the new technology on the two lines that have been continuously producing; the first of these lines was taken out of service last month and is currently being rebuilt. The new technology continues to perform above our expectations in efficiency and process stability. All operations are stable and safety performance has been excellent. We believe the company is well positioned to capitalize on a return to a normal pricing environment, specifically the relationship of the alumina price to the metal price.”