Rebounding Aluminium Market Translates to Positive Results in Century’s Q3 Numbers

Rebounding Aluminium Market Translates to Positive Results in Century’s Q3 Numbers

Chicago’s primary aluminium producer Century Aluminum released financial and production results for the third quarter yesterday, boasting of improvements across the board in both arenas.

Century shipped 184,974 metric tons of primary aluminium in the quarter, up quarter-on-quarter from last quarters shipping total of 182,829 metric tons.

Revenue in the quarter totaled US$400 million, up by 3 percent from last quarter’s revenue of US$388 million. Net income in the quarter came to US$20.8 million, a jump from the second quarter, when net income totaled US$7.1 million. Century says the significant rise was fueled in part by a US$5.5 million non-cash gain due to a settlement in retirement benefits of its employees at the former Ravenswood plant as well as a US$900-thousand gain related to LME forward sales.

Adjusted net income also rose, totaling US$14.4 million, which was a rise quarter-on-quarter from last quarter’s number of US$800 thousand. Adjusted EPS was significantly up in the quarter as well, rising from US$10 thousand last quarter to US$150 thousand in the just-ended quarter.

Adjusted EBITDA rose as well, to US$47.9 million in the third quarter from a second-quarter total of US$34.0 million. Century credits increased volume, a favorable sales mix, and a drop in raw materials cost as factors that improved that number in the quarter.

Century’s President and Chief Executive Officer Michael Bless lauded his company’s financial and operations performance in the third quarter.

“We are pleased with the company’s performance during the last several months. All operations are stable with production metrics and efficiencies demonstrating consistent improvement. As in past quarters, operating leverage on revenue growth continues to be favorable; the third quarter increase in sequential adjusted EBITDA exceeded the growth in revenue. Cash flow was far greater than adjusted net income.”

“Market fundamentals remain favorable, with good demand trends in our key markets in the U.S. and Europe,” he went on. “Commodity prices, including aluminum, alumina, petroleum coke and pitch, took a meaningful leg up beginning in late summer; we will see the impact of each of these prices reflected in our fourth quarter financial results.”

Bless continued by saying that a great deal of the market’s future hinged upon continued clean-up by Beijing of its country’s aluminium production.

“The driving force behind these dynamics remains the rapidly changing regulatory environment in China. We believe the current relationship between the LME price and that of key raw materials is distorted and that this correlation will return to historical norms within the reasonably near term. Over the mid-and longer-term, the direction of the metal price itself will depend squarely upon whether China is committed to eliminating illegally subsidized overproduction and enforcing the type of long-term discipline it has not to date exhibited. Until and unless confirmation of such behavior emerges, we continue to believe strong action is required to ensure all market participants are able to compete on a level playing field.”