In a recent announcement, Century Aluminum Company disclosed its financial and operational results for the third quarter of 2023. The company, a key player in the aluminum industry, outlined several significant figures and milestones achieved during this period.
Century Aluminum reported net sales of US$545.2 million, a 5% decrease from the previous quarter. This decline was mainly attributed to a drop in the realized London Metal Exchange (LME) aluminum price, which fell by US$134 per ton, settling at US$2,237 per ton. Despite this decrease, the company noted a reduction in energy and other raw material costs.
A significant development during the quarter was the completion of the Mt. Holly land sale, which brought in proceeds of US$26 million. Additionally, Century Aluminum saw a decrease in total debt by approximately US$41.4 million, bringing it down to US$512.0 million as of September 30, 2023. The company’s cash and cash equivalents stood at US$70.3 million, with overall strong liquidity amounting to US$305.8 million.
The third quarter also saw Century Aluminum finalizing a three-year Mt. Holly power agreement, marking a critical step in its long-term operational strategy.
Despite these positives, the company reported a net loss of US$42.0 million attributable to Century stockholders. This figure represented a US$49.5 million decrease compared to the previous quarter. The third quarter results were affected by US$28.2 million of net exceptional items. This included US$21.9 million of unrealized losses on derivative instruments, US$9.3 million related to power equipment failure at Jamalco, and US$1.0 million in share-based compensation costs. These were partially balanced by a US$4.2 million lower of cost or net realizable value adjustment, net of tax.
Consequently, Century’s adjusted net loss for the third quarter was US$13.8 million, a decrease of US$29.3 million from the previous quarter. The company’s Adjusted EBITDA attributable to Century stockholders stood at US$9.3 million, down by US$20.2 million from the prior quarter. This decline was primarily due to the lower realized LME aluminum price and product mix, somewhat offset by lower energy and raw material prices.
Century’s liquidity position at the end of the quarter comprised cash and cash equivalents of US$70.3 million, restricted cash from the Mt. Holly land sale of US$22.9 million, and US$212.6 million in combined borrowing availability, totaling US$305.8 million.
Jesse Gary, President and Chief Executive Officer of Century, commented on the progress in long-term initiatives during the quarter.
“Century made progress on its long-term initiatives in the third quarter. We were very pleased to reach agreement on a new three-year power contract for our Mt. Holly smelter that should enable us to continue to invest in this excellent smelter and its employees for years to come. In Iceland, our new billet casthouse at Grundartangi is nearing completion, and we are already experiencing strong customer engagement for our new Natur-Al low-carbon billet products.”
Despite the volatile market conditions and lower aluminum prices, Gary noted that these were largely offset by lower input prices and other cost savings in the quarter. He emphasized Century’s focus on disciplined cost and operational execution, positioning the company well for when market conditions improve.
Looking ahead to the fourth quarter of 2023, Century Aluminum expects its Adjusted EBITDA to range between US$0 to US$10 million, factoring in decreased LME prices, partially offset by lower raw material prices.