Second Quarter 2020 Financial Results

l  Shipments of 210,309 tonnes, a 4% increase over prior quarter

l  Net sales of $401.9 million, a 5% decrease over prior quarter primarily due to lower LME prices and regional premiums

l  Net loss of $(26.9) million, or $(0.30) per share

l  Adjusted net loss of $(18.4) million, or $(0.19) per share

l  Adjusted EBITDA of $4.7 million

T1: Financial Data

In the second quarter of 2020, shipments of primary aluminum were 210,309 tonnes compared with 202,905 tonnes shipped in the first quarter of 2020.  Net sales for the second quarter of 2020 were $401.9 million compared with $421.2 million for the first quarter of 2020, reflecting a 5% decrease over prior quarter primarily due to lower LME prices and regional premiums.

Century reported a net loss of $(26.9) million for the second quarter of 2020 and an $(18.4) million net loss on an adjusted basis.  Second quarter results were negatively impacted by $8.5 million of exceptional items, including a $6.4 million lower of cost or net realizable value inventory adjustment (net of tax) and $2.7 million of unrealized losses on forward derivative contracts (net of tax), offset by a $0.6 million insurance recovery related to the 2018 equipment failure at Sebree.  This result compares to a net loss of $(2.7) million for the first quarter of 2020, or $1.0 million net income on an adjusted basis.

Adjusted EBITDA for the second quarter of 2020 was $4.7 million, a decrease of $23.4 million primarily driven by unfavorable LME and regional premium price realizations, partially offset by lower raw material prices and lower operating expenses.

Century's cash position at quarter end was $174.1 million, a sequential increase of $26.5 million.  Revolver availability was $23.3 million.

"We have maintained the measures we instituted in early March aimed at protecting the health of our employees and ensuring the continuity of our operations," commented Michael Bless, President and CEO.  "The program has remained effective; all plants continue to run with minimal disruption.  We have also maintained the stringent fiscal discipline we established several months ago, with exceptions for spending aimed at safety or sustainability.  Most importantly, our people continue to dedicate themselves to their own safety and that of their colleagues."

Mr. Bless added, "Second quarter financial performance was consistent with our expectations.  Cash flow was strong, and liquidity remains robust.  In early July, we completed the refinancing of our only public debt issue; the new notes do not mature until 2025.  Looking ahead, due to the normal lag in our price realization, third quarter reported financial performance will reflect the depressed commodity price environment that persisted throughout April and May.  The metal price has since then improved meaningfully, consistent with the progress in a broad spectrum of manufacturing sectors and in the economy more generally; we are seeing evidence of these trends in regional and product premiums.  That said, the U.S. delivered price remains depressed as the direct result of the surge of primary aluminum imports from Canada that began almost immediately after that country was exempted from the Section 232 tariffs in May 2019, breaching the clear commitment that was made; the re-imposition of the tariff remains the only method of regaining the effectiveness of the program."

"Century remains in excellent shape to address any number of scenarios," concluded Mr. Bless.  "We are prepared to operate in the present manner for a protracted period, until the public health and economic outlooks become clearer.  We also remain focused on the strategic initiatives that will drive long-term value, a key example of which is the realization of full market power for Mt. Holly.  To that end, we continue to work with the newly formed municipal utility to establish the necessary contractual arrangements.  With a competitive power price, Mt. Holly would be the most efficient primary aluminum smelter in the U.S. and would have a long and productive future ahead of it."

T2: Operating Data

(in millions, except shipments)

(1)   Excludes scrap aluminum sales and alumina sales.

Source: Century Aluminum