In This Article:
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Century Aluminum Co (NASDAQ:CENX) reported $78 million in adjusted EBITDA for Q1 2025, reflecting strong operational performance.
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The company successfully reduced net debt by $55 million and increased liquidity by $94 million during the quarter.
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CENX's safety performance improved across all locations, highlighting the company's commitment to a high-performance safety culture.
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The company reached an extension agreement with a major power provider in Iceland, ensuring stable power supply until 2032.
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CENX is on track to complete a major capital improvement program at Jamalco by year-end, which is expected to enhance power generation and reduce costs starting in Q1 2026.
Negative Points
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Higher energy prices due to cold winter temperatures impacted Q1 results, although prices have normalized in Q2.
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Operational instability at Mount Holly led to increased operating costs and slightly lower production, which remains a focus for improvement.
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The European market showed demand weakness, affecting billet orders from the Grundetangi smelter.
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Coke, pitch, and caustic soda prices rose in Q1, contributing to increased raw material costs.
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A one-time increase in maintenance expenses at Seabree is expected to impact Q2 financials by approximately $10 million.
Q & A Highlights
Q: Can you confirm if the incremental OpEx costs of $10 to $15 million in Q2 are one-time expenses that will reverse in Q3? A: Yes, those costs are one-time and should reverse in Q3. The higher alumina costs were also one-time, primarily due to timing of vessel sales and some cost pressures at Jamalco.
Q: How much of the manufacturing credit receivable do you expect to receive in Q2, and when should the remaining receivables be expected? A: We expect to receive about $60 million of our FY23 amount in Q2. The remaining $20 million is expected later this year or early next year. Typically, we file around the end of Q1 into Q2, and proceeds are received 3 to 6 months thereafter.
Q: With net debt reduced and liquidity above target, is reducing debt still the top priority for excess cash? Are there other cash flow considerations for the year? A: Yes, reducing debt remains a top priority, along with continuing our existing CapEx programs. Additional cash will primarily be used to bring down debt levels.
Q: Can you provide an update on Jamalco operations and any further cost improvements or capacity expansions? A: Jamalco is performing well, hitting its highest quarterly volume levels since acquisition. We aim to move it into the second quartile of the cost curve by executing our CapEx program, including a new steam generation turbine by year-end. This will reduce third-party power purchases starting in Q1 2026. We target increasing capacity to 1.4 million tons over the next few years.