Century Aluminum (CENX) 8 Aug 242024 Q2 Earnings call transcript

Good afternoon. Thank you for attending today's Century Aluminum Company, second quarter 2024 earnings conference call. My name is Forum and I will be your moderator for today's call. [Operator Instructions]. It's now my pleasure to pass the conference over to our host, Ryan Crawford with Century Aluminum. Mr. proceed. may you Crawford,

President Good Treasurer. joined and Gary, here Executive will President questions. Executive and operator. Peter your Officer, conference Senior take our Trpkovski, Century's to prepared call. Chief Vice Vice Bialek, Gerald I'm today Finance Officer, Chief afternoon you, Financial welcome and and everyone, of the president and After Thank by we Jesse comments,

of website disclosing on available information As a as website We and a use presentation means Regulation company reminder, the our our with FD. material @www.centuryaluminum.com. about is complying today's for

moment Turning with review to to Slide and in X, please forward-looking that, to And cautionary take non-gap here call a I'll shown discussion. measures the contained to today's Jesse. statements statements financial the respect with hand

thanks before I'll on Thanks to it by and to call today quarter joining. questions. environment our thoughts Gerry providing then the some financial everyone and the turning for reviewing market results start second and performance detailed taking over your for current Ryan, the and

as roll LME to financial and the the begin performance quarter lagged our strong and in and strong plants. prices second in quarter results produced prices are will Gerry performance at adjusted our increased with of EBITDA quarter full profitability third LME level team second the drove quarter contractual our will aluminum in million. Our you financial with continued results. regional the premium pleased here, across benefit but continue $XX the really to Overall, details through we improving give the operating the both pricing excellent observed

quarter, by $XXX of debt million. reduced the our We nearly liquidity $XX outstanding over million strong also driving in

recently, prices quarter global other in aluminum green broad is applications. energy China More during weighed Demand energy economy, the renewable the especially have as higher. concerns especially strongest aluminum and LME to Slide as in prices regional areas in macro and to markets. have rose premiums transmission Turning relating stronger X, through both solar demand, retreated second and on

we lightweighting global are paired term, historic several aluminum. supply to Over that from easy and assets to see in and short confident expected the drive towards over electrification we levels little markets it in trends and and markets to well inventory aluminum our continue near years, steep next aluminum that remain remain with the placed longer growth lows Europe. aluminum is increased demand When for continue benefit to why the believe are US will contango

of reaching averaging during for the market in in higher prices production Turning to than constrained. XX% far Alumina, near a higher. lack reflect and remained prices China spot QX drove in cargoes issues as Alumina quarter led supply QX quarter These have Australia available levels per and API Alumina rose quarter third the prices a the ton so tight high significantly with their continued the as during June. and to over prices remains $XXX

Given the very strong quarter. Alumina second we the pleased Jamalco market, with during operational constraint were performance

as pricing second operations tons million combined targeted As are roughly annum commercial that company are the net with rate per Jamalco price aluminum. contracts in production the API noted, X.X to neutral our Jamalco long-term it to our of previously the produces make when linked quarter.

from and will Over as driven prices, continue aluminum global exposed Bauxite without longer supply a the to suspect market source of locations. volatility remain largely expect geopolitical we the Bauxite supply while follow to term, remain to Sebree prices refineries exposed Alumina difficult we dedicated to Alumina that

stringent actions energy standards. and over to near Alumina addition, would term. constrain production We regulators to announced to In earlier refineries these act efficiency growth year, believe this medium be subject the Chinese Chinese the Chinese will Alumina emission more

additional including goods, products. new requirement announced In actions EU President and in July, Similarly, June, of tariffs global downstream markets Chinese the industrial aluminum that took aluminum environment, and XXX up key vehicles. In an the trading on Chinese US I tariffs US global of May, during cast our announced to XX% many a additional electric smelted and quarter the China, of aluminum ensures will mineral order production avoid Section strategic certain that to supply announced joined duties. the XXX of Mexico Turning towards cast in dollars in transformed US be and and the Biden on impact at cannot governments nearshoring each flows the that was and EU House countries to that the in billions products expansion into Section Europe. where Russia, the he aluminum, XX% White smelted and other in into

domestic in Finally, The bill anticipated at China, correspondingly extrusion anti-dumping call, the imposed last immediately to demand. effect May, Vietnam. on significant we from entering support US have which into domestic Commerce of XX and aluminum duties our duties extrusions including the Mexico, and started demand on Department US on Columbia, went countries, as

As some started our conditions US a of the these markets. here side and better These supply trade back continue of better and value US second provide when This substantial adjusted bill at aluminum year more based to for market show especially and pricing the the existing pricing bill viewed see the trade the demand measures to service constructive environments US and allows tariffs for in on expect markets, pricing the chains and Section production up be other with over benefit already sales positive footprint. did volumes the spot uptick actions, we into in and a mechanism anticipation to significant place balance carbon in EU year, this some XXX tariffs, in half will of reminder, together Century from EU EU including short hold XXXX. in improving also this to and environment. We border but customers, the US to us

energy the the in Iceland, quarter. curtailment and Grundartangi our lifted expected, quarter by During locations The to returned was end. quarter second stable In during the megawatt and strong second operating as operations, we production full XX announced saw across performance previously

power once curtailment the did quickly team job Our efficiently of excellent an and ended. production restoring

seen restoring production have like on around team not Grundartangi As easy. a following that we a the curtailment is well job to many the congratulate I'd smelters done. world,

brought natural our early with significant natural stable, in which needed We parishes excited Operations At operations months. carbon working QX. Point supplying prices and and market. port Holly QX. We summer much from the production European to surrounding at unfortunately a testament by billet facilities operating July. teams The rain to Sebree and surge, we the our with continue were to in begin we Rocky Parish prices At very near the made is Jamalco, trials the new normal very local US, cast remain continue levels heavy landfall to qualify in QX communities, winds Grundartangi announced, billets to produce over this In are $X. driven officials Grundartangi previously expect Mt. the by at as near house, to customers in storm during natural hurricane those storm our into four Hurricane gas Beryl we green and and constructive, be energy our and both remain impacted key low to and our hot and Category need. when Clarendon high [Indiscernible] assist other

refinery we refinery any significant temporarily of operations procedures. part suffer not injuries as operations, or to to standard fortunate damage were did we of hurricane curtail While our the preparation the

production Jamalco refinery So once restoring levels. had the to returned remarkable job passed and team full did the a operations storm had

portion production Jamalco's while facilities where was a addition, In damage, damaged by escaped impacted port conveyor the facility the undergoing and its of was Alumina the repair. storm, significant

While Alumina to customers. those port alternative secured were to has ensure repairs Jamalco being continued its completed, shipments arrangements

growth progress our we second on projects good the made during Finally, quarter.

have would to diligently at evaluating continue significant our While quarter time, QX this any a don't walk will and on through able update to we third expect now we quarter further outlook. and Gerry to on our the each provide call. updates you work be

Jesse. you, Thank

lower basis, five to second a of metal than sequentially. increase to and were versus premiums Let's turn results. finding $XX approximately Slide resulting sales X due a prior slightly quarter by last in regional quarter delivery million, quarter prices global typical increased Realized driven higher XX% On to XXX,XXX shipments quarter, net review fluctuations. consolidated tons, prices second

EBITDA quarter. Looking per liquidity [indiscernible] for available was to consists of by adjusted mainly forward million, This and million prices $X million per by realized $XX on of cost operating million in $X main of based of compensation of million $X increase nearly was items impact of sequential by a improved the at to $X.X million the and were $XX income results, adjusting Century credit driven offset cash Adjusted metal attributable decade for million a contracts. on or net million. QX deduction and share. inventory. liquidity The unrealized or the $X end $XXX strongest and premiums. million the in a This our lower higher share net was position realizable regional facility. $XXX is value Partially We $X

Aluminum prices for $XX in delivery per $XX X per contributed Slide was of million $XX with premium power second the costs of US EBITDA. EBITDA $XXX to premiums $X metal $X premium up prior quarter, quarter our by and quarter. smelter mixed was million. Turning In increased of $X,XXX to per LME Midwest compared up incremental explain adjusted versus LME $XXX production higher adjusted Iceland costs were as market for Together improvement second ton was European Realized the higher ton and sequential $XX. an regional was realized prices up while ton prior total million. quarter

material ton prices was a our The volume Realized headwind. million to ton decreased decreased shipment the reminder, together prices per power improved LME was a $X normal As to power adjusted $XX $XX by to shipment mostly decreased timing. prices. EBITDA. pitch offset helping other lower smelter realized Iceland volume and fluctuations the raw prices per linked expense due in is The $X Coke headwind for million,

We QX, buying our in therefore, expect these year to change no and expectations. full shipments

to the activities last deferred $X at quarter that our we Iceland million project. Capital the our completion and the Casthouse flows. let's and to relates zero we on We expense which $XX in million $XX curtailment. related end balance million working potlining turn facilities Revolvers cash. with of in reduced the two, X QX to activities quarter million $XX began Adjusted of the revolving million, of contributed As of an expenditures with quarter, normal With incremental at not At completed cashflow. discussed to that, paid power We repeat. will we a borrowings credit cash. million. end, capital Grundartangi down the short and EBITDA had quarter ice look $XX These $XX for in drove term US Slide totaled both experienced

some you for the into give I'll and XX, Slide insight our to turn Let's third quarter. expectations

For up to Premium about the prices. $XXX ton ton is lagged is LME US or per of QX, $XX $XXX be is expected the The be quarter. $XX. versus about QX at per QX forecast ton to realized $X,XXX ton of versus Midwest up European expected per per second The Delivery premium $XXX lagged

changes EBITDA Taken LME and increase QX together, million approximately $XX to the versus premium are by QX expected levels. $XX to delivery

we We Collectively, our flat. previously headwind. volume expect will timing of prices $XX power be The about to tailwind raw quarter of million. to a discussed be be over key materials quarter $X shipment million a approximately expect

forward between in headwind million. a questions related such outlook as projects. as range All we Beryl adjusted is a your over today, Hurricane of $XX our our EBITDA of in expected the be the summer and operator. to expect a our now to results QX QX adjusted progress on will we of to administrative seasonality impact is and to expenses for turn $X outlook. financial considered factors million in look continue and The We reflected growth to Finally, call to $XX we'll about be

Instructions]. [Operator

first line comes with now of the Riley is Lucas your from B. question Our open. Securities. line Lucas, Pipe

power in week. been perspective the out very of last the you much, I very on a on power excitement markets. wanted to AI. your There's auction PJM need We get afternoon constructive saw operator. Thank there lot Good. everyone. for Jesse,

and at very long megawatts, has XXX today power parties. from infrastructure with hospital there Thank are optionality interest how if that you think third You you about any and so I about much. been the wondered around power

the question. power assets as and here at world the Thanks Lucas. and Obviously that. you of around value. estimates out we're on figure a looking for curtailed how build with there. and aware and the constantly quite especially all substantial the, our order the going in know, With for we, to to US trends we out out of hi markets what's both Europe storyline the power all lot always around and the looking our Obviously, course, we're energy are of we own watching really really required of Yes, in of AI alternatives, at assets, maximize

guess on future. higher Hawesville But I would in what we pursue. of whatever just maximize to come aluminum end, adoption a say we'll so, continue and is great I form in think And what the the in with it's may asset we'll that that prices value

development, share Jesse, That, terms color. your been side One, you. of move from you you to I attention It's this at that anything guidance up treasury. point treasury clarification very pretty, in pretty development terms quiet two smelter you that on then update incremental there and of have a helpful. with appreciate of the that to any to of -- in forward on I'll you be going that's full included might timeline Thank are kind from from guidance, and XXx. for the kind able in to in what much. is follow of Thank new has XXX? able additional be increased absence been

same Thanks continued on on, administration imagine, the calls. might the Sure. to with ways you on in many XXX about engage as talked Lucas. and previous that we we Yes, of

final the we industry. inclusion the ultimate materials regulations for US of You ultimate think important the are and very well the timing know, as calculations of the both as raw

But you just have And we for I thankful matter. say their this very I very engaged so, really to for continue to timeline continued be would on from discussions. updated time. have and we're at engagement we've the those don't administration an this continued

think moving and in I mind. importance everyone recognizes United that the industry with States in aluminum forward the the of

you those Thank the incremental the to EBITDA All line you one with of right. last of volumes? profile? a last the Holly Would margin the, be restart much. those to We'll Jesse, Can little in current one I'll below above stay in of speak very bit tuned. with your squeeze try kind Mt. XX%. with margin profile

I to of past, probably out of always work looking at Sure. to as we as to the continue in conditions But monitor Good tons, about things and profitable on we in in of together that project question prepared continue all those incremental of And my terms restart. last most do as and Lucas. macro those remarks, mentioned well put specific timing margins, talked your those are we the that question tons the on tons. filter

fixed spread If large really, industries, perspective. margin compared what you continue are incremental to to other tons over those the a costs get and from pretty benefit

I to in it's past, that we we time we ready for, one confident And as the remain is like that. right, would really said to get a when it's and to in do. our execute So, ability project the continue

best the All luck. appreciate call. the I of now. over Jesse, I'll for it turn

open. Our is now from next Katja, BMO. Jancic, Katja line line question your of comes with the

taking Can for talk were the correct, that would if the questions. you is refinery Jamalco, majeure. reports or bit the some why declared you be if volumes there my that are on shipments more force thank Hi, a that and normal? Maybe starting

that Katja. Yes, majeure you course a is of declare of variety for And, correct, force reasons.

said, right an we export, we main commission Rocky through right alternative which Point running As now. is our out and are of now port is of port

island. setup as we full that said, to off alternative to going to plant and export related I continue is port back the place really to in majeure force and those the so, And forward. solutions have But Alumina production

right normal So shipments are as now. going

not material Yes, going to impact results our with results a forward. we to don't expect or

exports to normal port but they're running make when of say they're out alternative island. the exactly an as continuing we're from can't You

maybe to utility utility as power, hospital. agreement or you Have lot from And follow an the would -- you to of looked that a about that? question your there's a on Okay. then -- the Would the Lucas' obviously and perspective? up at at option if looked with there's have be a allow about questions

recall the Kentucky in, essentially we is variety do both access ranges, arrangements energy might markets have plants what wholesale of fairly I that MISO. where through in have contractual to Yes, a unique

And arrangement so, a us of flexibility [indiscernible] advantageous and a with very been time. for lot that's over

future for look that to the ultimately outcome advantage will at we possible both from if is. matter so, continue think flexibility the perspectives, a we us, of what And be variety no

Okay. Thank Thanks you very much.

Our next now in with comes your Timna Tim, question the Wolf Tanners line of now is Research. open. line

at just like about you any insurance more Jamalco. a situation more it and Yes, ask or good thank collectibles this don't is afternoon. benign, issue Is little the entirely on you, wondering color? have bit like on and there an Why impact doesn't QX a little

Sure, the said that's what impacted, right? That's press definitely were this we've release on phone in yes. we said mean, what I we call. and

arrangements the work, it the the at sort a haven't of think itself, did, convey of has was it, at our work. other and As making At these plant port we it while had done making as we the the of repairs down Rocky I blown taking than away. hurricane a up. took it's job impact plant a Point really to and our I said, is Alumina can up. at done overall of and, course good not some get lost results. There while volume alternative days team the material back some plant we We impact. But while island financial the for more portion the really of it our down bringing few But said, we brought really shipping part sort like the port so we any south skirted we're course then full hurricane back today, of the it that back preferred we to while than would've production and preparations

to year the of here and Holly about that see wouldn't probably to looking it can mulling that. a that that say more over color imminently, us in little you you're for middle if Okay. what is or you're in the a you Mt. still we're fair to make give Thank decision? restart it Back bit you for past

Yes.

as variety return come prices that to that what to So anywhere the what what whether of look is volume CapEx enable global the has we a is are. world, go are, premium the in would the is, time, restart factors, at the market restart, on profile aluminum premiums Midwest in the the at any value-added what

focused down been bringing really what so, multivariable just we time is a that it's do once to And make position. we've And analysis. on restart the

months. be from talked previous that the working And chains right, to think we supply I things is, on of things they making so, that few of then sure when shortening call, But we'll as calls see CapEx can decision lot XXXX. that in past been the over the sure we've we on materials, think, ask. matter us no a time's and the the to have kind And on requirements project for making of I what making we those I on energy, all raise last ready need, people get you'll said don't

Thanks. here have it's recall, seen could sustainable change past hedge about a broader is forward straight Got that been usually continue up the I be in if see this curious thing and, great if march mean, that high to how just If markets. have what aluminum but it's level what prepared some remarks not a there I unusual. as and back long, really you're so I one down in the or action question. you the but it's aluminum baffling thinking just that the on to just and you lasts? about long we how the go aluminum this, dynamic that that's now, this it. And but I'm Jamalco any wondering had could I know a

a Yes, it's point. good

high haven't basis. percentage which somewhere what to this We call price in an we is the relatively aluminum on seen Alumina mid-XX% today price, LME

seen tight regulation today. here. And reasons. and up are the shutdowns China. is so, shortage for driving in We've And and should It Australia. We've of quite in production from in at that we there, do be been that's to out supportive think price, really the what's some that's structural aluminum quite aluminum Alumina increasing the price market real seen the

so, that's And in in aluminum. time, relatively the And of the Traditionally, said the for alumina. is the we're relationship Alumina more tight to over mid-XX% market mid-teens. I now

So of high it really a should from relationship supportive the and be aluminum really here. is quite price

it for That's Okay. me.

so no you. will Thank I at closing are remarks. pass any There questions for back waiting this time,

Thanks, call. the everybody, for joining

today's Earnings Call. This Company's XXXX Conference participation. Aluminum concludes Quarter for your Century Thank Second you

You lines. may now your disconnect