Century Reports 2008 Financial Results
MONTEREY, CA. Feb. 19, 2009 -- Century Aluminum Company (NASDAQ: CENX) today reported a net loss of $700.2 million ($14.27 per basic and diluted share) for the fourth quarter of 2008. Reported fourth quarter results were impacted by a charge for goodwill impairment of $94.8 million ($1.93 per basic and diluted share), a tax charge of $522.9 million ($10.66 per basic and diluted share) related to the recording of a valuation allowance on deferred tax assets and an inventory write down to market value of $55.9 million ($1.14 per basic and diluted share).
For the fourth quarter of 2007, the company reported a net loss of $112.3 million ($2.74 per basic and diluted share). Reported results for this quarter were impacted by an after-tax charge of $147.7 million ($3.61 per basic share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting and by a tax benefit of $4.0 million ($0.10 per basic share) related to the increase in the carrying amount of deferred tax assets as a result of a state tax law change. The dilutive effect of the options, convertible notes and service-based awards would reduce basic EPS by $0.05 per share.
Recent highlights include:
| · | 2008 direct and toll shipment volumes totaled a record 803,771 metric tons, a 5 percent increase from 2007. During the fourth quarter, the Grundartangi smelter shipped at an annualized rate of more than 276,000 metric tons. |
| · | All primary aluminum facilities operated safely at or above available potline capacity during 2008. |
| · | In December, the company issued a WARN notice and implemented the immediate curtailment of one potline at the Ravenswood, West Virginia smelter. Pursuant to the WARN notice, an orderly curtailment of the entire smelter was essentially completed by mid February. |
| · | The company completed a public offering of 24.5 million shares of its common stock in early February. Net proceeds were approximately $104 million. |
| · | Salaried staff reductions of approximately 13 percent were implemented at the Hawesville, KY smelter and Monterey, CA headquarters. |
| · | The company's greenfield smelter project near Helguvik, Iceland, remains under review. Site activity is continuing at a minimal level. |
For 2008, Century reported a net loss of $898.3 million ($20.07 per basic and diluted share). Included in these results is a net after tax charge of $742.1 million ($16.58 per basic and diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. Full year results were also impacted by a charge for goodwill impairment of $94.8 million ($2.12 per basic and diluted share), a tax charge of $522.9 million ($11.68 per basic and diluted share) related to the recording of a valuation allowance on deferred tax assets and an inventory write down to market value of $55.9 million ($1.25 per basic and diluted share).
For 2007, Century reported a net loss of $101.2 million ($2.72 per basic and diluted share). Results for 2007 include a net after-tax charge of $328.3 million ($8.83 per basic share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. 2007 results were also impacted by a tax benefit of $8.3 million ($0.22 per basic share) related to the increase in the carrying amount of deferred tax assets as a result of a state tax law change.
Sales for the fourth quarter of 2008 were $402.2 million compared with $432.1 million for the fourth quarter of 2007. Shipments of primary aluminum for the 2008 fourth quarter were 202,259 tonnes, compared with 198,138 tonnes shipped in the year-ago quarter. Sales for 2008 were $1,971 million compared with $1,798 million for 2007, and total 2008 primary aluminum shipments of 803,771 tonnes compared with 766,951 tonnes shipped in 2007.
“Century has taken aggressive action in response to the global economic crisis and its impact on commodity prices,” said president and chief executive officer Logan W. Kruger. “In the United States, we have begun implementation of the difficult actions required to bridge the current environment and lay the groundwork for a stronger company when metal markets strengthen.
“Our greenfield smelter project near Helguvik, Iceland, remains under review; new construction activity has been essentially halted. We are in the process of rescoping the project in its entirety and are also reviewing financing options. We continue to view Helguvik as an excellent investment for our shareholders and remain convinced that the environment in Iceland will remain attractive to our business over the long term. In addition, our forecasts of capital and operating costs have fallen since the project’s inception.
“We continue to believe the factors supporting the long-term growth of aluminum demand remain in place. We expect that Century’s improved liquidity and streamlined cost position will enable us to weather the current global financial crisis and prepare the company for renewed profitable growth once aluminum markets stabilize and recover. We have further options to enhance both our cost position and liquidity, and will implement them as appropriate to protect the long-term value of the company.”
Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an ownership interest in alumina and bauxite assets in the United States and Jamaica. Century's corporate offices are located in Monterey, California.
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Century Aluminum’s quarterly conference call is scheduled for 5:00 p.m. Eastern time today. To listen to the conference call and to view related presentation materials, go to www.centuryaluminum.com and click on the conference call link on the homepage.
Contacts:
Mike Dildine (media) 831-642-9364
Shelly Lair (investors) 831-642-9357
Certified Advisors for the First North market of the OMX Nordic Exchange Iceland hf. for Global Depositary Receipts in Iceland:
Helga Gunnarsdottir, Director-Corporate Finance, NBI hf.
Astros Vidarsdottir, Senior Manager-Corporate Finance, NBI hf.
Cautionary Statement
This press release may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The company has based its forward-looking statements on current expectations and projections about the future; however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the company's actual results to differ materially from those expressed in its forward-looking statements. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made.
