Century Reports 2009 Financial Results
MONTEREY, CA. February 23, 2010 -- Century Aluminum Company (NASDAQ:CENX) reported a net loss of $24.4 million ($0.28 per basic and diluted common share) for the fourth quarter of 2009. Financial results were negatively impacted by net after- tax expense of $11.5 million related to the purchase of downside aluminum price protection for a portion of Century’s U.S. production through 2010, and a net after-tax charge of $5.3 million for losses on early extinguishment and modification of debt. Financial results were positively impacted by a $6.6 million benefit related to discrete income tax adjustments. Cost of sales for the quarter includes a $17.2 million net after-tax charge for the portion of power costs at Hawesville payable by the previous power supplier per the terms of the power agreements.
For the fourth quarter of 2008, Century reported a net loss, as adjusted, of $693.5 million ($14.14 per basic and diluted common share). Reported results were impacted by a charge for goodwill impairment of $94.8 million, a tax charge of $522.9 million related to the recording of a valuation allowance on deferred tax assets and an inventory write down to market value of $55.9 million.
Recent highlights include:
| · | The Grundartangi smelter shipped at an annualized rate of 276,000 metric tons in the fourth quarter. Shipments for the full year increased 2 percent over 2008. |
| · | Nordural continued to advance the development of the Helguvik smelter in preparation for an anticipated restart of major construction activity in 2010. |
| · | Century retired $128 million principal amount of its 1.75% Convertible Senior Notes in exchange for 11.4 million shares of its common stock. |
| · | Century exchanged $247 million principal amount of new 8% Senior Secured Notes for $245 million principal amount of existing 7.5% Senior Notes and revised certain indenture terms to provide the Company with increased operating flexibility. |
| · | Cash at December 31, 2009 was $198 million. |
For 2009, the company reported a net loss of $206.0 million ($2.73 per basic and diluted common share). These results were negatively impacted by several items, including: a net after-tax charge of $41.7 million for costs associated with production curtailments at U.S. smelters; a $73.2 million net after-tax impairment charge associated with the divestiture of our alumina and bauxite investments; a net after- tax charge of $11.0 million related to the purchase of downside aluminum price protection for a portion of our U.S. production through 2010; and a net after-tax charge of $4.7 million for losses on early extinguishment and modification of debt. Results for the year were positively impacted by a net after-tax benefit of $57.8 million, primarily from realized and unrealized gains related to the termination of the existing power contract and its replacement with a new power contract at Hawesville and a $14.3 million benefit related to discrete income tax adjustments. Net after-tax inventory lower of cost or market adjustments of $33.6 million favorably impacted the yearly results. Cost of sales for the year includes a $31.6 million net after-tax charge for the portion of power costs at Hawesville payable by the previous power supplier per the terms of the power agreements.
For 2008, Century reported a net loss, as adjusted, of $895.2 million ($20.00 per basic and diluted common share). Included in these results is a net after tax charge of $742.1 million 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, a tax charge of $522.9 million related to the recording of a valuation allowance on deferred tax assets and an inventory write down to market value of $55.9 million.
Sales for the fourth quarter of 2009 were $256.8 million compared with $402.2 million for the fourth quarter of 2008. Shipments of primary aluminum for the 2009 fourth quarter were 147,700 tonnes, compared with 202,260 tonnes shipped in the year-ago quarter. Sales for 2009 were $899 million compared with $1,971 million for 2008, and total 2009 primary aluminum shipments of 605,126 tonnes compared with 803,771 tonnes shipped in 2008.
"Century's operating environment generally improved during the latter part of 2009, in concert with global economic conditions," remarked Logan W. Kruger, president and chief executive officer. "Demand for aluminum and other industrial metals has remained stable in the developed economies; in addition, economic indicators in these regions have generally shown improvement. China's impressive growth has continued despite recent signals that its government will act to contain potential economic excesses; economies in India and certain other developing regions have also performed strongly. Despite these encouraging signs, aluminum inventory levels remain elevated and higher cost capacity in the western world has continued to operate. In this environment of ongoing uncertainty and volatility, we remain committed to protecting the company's financial strength and flexibility while investing significant effort and resources toward preserving and enhancing our attractive growth opportunities.
"During the last months of the year we took additional steps to further bolster Century's financial strength. We completed two exchange offers and consent solicitations for our public debt securities; these transactions decreased our leverage, lessened our near-term maturities and improved the company's overall operating flexibility. The restructuring and cost reduction actions we took in 2009 have produced a cost structure which provides for attractive conversion of higher aluminum prices into increased profitability and cash flow. These results are the direct outcome of the dedication and skill of the leadership teams and employees at all of our facilities.
"We continue to expend significant effort on the development of our new smelter at Helguvik," concluded Mr. Kruger. "We remain convinced this project is unique in the world in terms of strategic location, overall operating environment and cost structure; we are confident it will provide our shareholders with attractive returns for decades. We have made encouraging progress on our financing program for the project. In addition, we are focusing on the major elements required for a full restart of construction activities; the most significant of these items remains finalizing the power arrangements, including confirmation of the financing plans of the power suppliers. Assuming a satisfactory conclusion of these discussions in the near term, we believe we can achieve a restart of major construction around the middle of the year.”
Century Aluminum Company owns primary aluminum capacity in the United States and Iceland. 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:
Atli B. Gudmundsson, Senior Manager -- Corporate Finance, NBI hf.
Steingrimur Helgason, Director -- 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.
