Century Aluminum (CENX) 8-K Century Aluminum Reports Second Quarter 2006 Earnings

Exhibit 99.1

Century Aluminum Reports Second Quarter 2006 Earnings

MONTEREY, CA. July 27, 2006 -- Century Aluminum Company (NASDAQ:CENX) reported net income of $45.8 million ($1.41 per basic share and $1.35 per diluted share) for the second quarter of 2006. Reported second quarter results were negatively impacted by an after-tax charge of $19.5 million ($0.60 per basic share and $0.57 per diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting.

In the second quarter of 2005, the company reported net income of $40.7 million ($1.27 per basic and diluted share), which included an after-tax gain of $15.7 million ($0.49 per basic and diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting.

Second quarter 2006 highlights included:

·   Revenues of $406.0 million and operating income of $99.6 million were up 17 percent and 55 percent respectively from highs set in the first quarter of 2006

·   Strong operating results at all locations

·   At Nordural, the capacity expansion from 90,000 to 220,000 metric tons per year (mtpy) remains on schedule and budget for a fourth quarter, 2006 completion

·   The expected completion date of the further expansion of Nordural to 260,000 mtpy was accelerated to the fourth quarter of 2007

·   A labor agreement was reached with the United Steelworkers at the Hawesville, Kentucky smelter

·   A memorandum of understanding to purchase electrical energy for the greenfield smelter project in Helguvik, Iceland was signed with Icelandic power producers Hitaveita Sudurnesja and Orkuveita Reykjavikur

·   A joint venture agreement was reached with Minmetals Aluminum Company to explore the potential of developing a bauxite mine and associated 1.5 million mtpy alumina refining facility in Jamaica

Sales in the second quarter of 2006 were $406.0 million, compared with $283.3 million in the second quarter of 2005. Shipments of primary aluminum for the quarter totaled 378.6 million pounds compared with 339.5 million pounds in the year-ago quarter, reflecting the impact of the Nordural expansion.

For the first half of 2006 the company reported a net loss of $95.8 million ($2.96 per basic and diluted share), which includes an after-tax charge of $203.0 million ($6.28 per basic and diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. This result compares with net income of $52.5 million ($1.63 per basic and diluted share) in the year-ago period.

Sales in the first six months of 2006 were $752.9 million compared with $568.7 million in the same period of 2005. Shipments of primary aluminum for the first six months of 2006 were 724.6 million pounds compared with 676.5 million pounds for the comparable 2005 period.

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“Ongoing sound operating results at all of our facilities, robust markets and good progress on our Icelandic expansion resulted in an outstanding second quarter,” said president and chief executive officer Logan W. Kruger. “The labor contract at Hawesville provides stability for the long-term operation of that plant. Importantly, we continued to make solid progress on our growth plan. We brought forward the 40,000 mtpy Nordural expansion to 260,000 mtpy into 2007. Also in Iceland, we advanced our growth plans by securing electrical energy for the first phase of the Helguvik greenfield project. Lastly, we are pleased to be working with our partners at Minmetals toward what could become a major expansion of our presence in Jamaica.”

Century’s primary aluminum capacity will stand at 745,000 mtpy by the fourth quarter of 2006. The company owns and operates a 244,000 mtpy plant at Hawesville, Kentucky; a 170,000 mtpy plant at Ravenswood, West Virginia; and a 90,000 mtpy plant at Grundartangi, Iceland that is currently being expanded to 220,000 mtpy by the fourth quarter of 2006. The company also owns a 49.67-percent interest in a 222,000 mtpy reduction plant at Mt. Holly, South Carolina. ALCOA Inc. owns the remainder of the plant and is the operating partner. Century also holds a 50-percent share of the 1.25 million mtpy Gramercy Alumina refinery in Gramercy, Louisiana and related bauxite assets in Jamaica. Century's corporate offices are located in Monterey, California.

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.

Century Aluminum Company, Monterey, California

Michael Dildine, 831-642-9364

mdildine@centuryca.com

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Century Aluminum Company

Consolidated Statements of Operations

(in Thousands, Except Per Share Amounts)

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2006			2005			2006			2005
NET SALES:
Third-party customers	$	356,242		$	243,329		$	654,715		$	490,754
Related parties		49,734			39,927			98,207			77,898
		405,976			283,256			752,922			568,652
COST OF GOODS SOLD		297,972			237,908			568,450			471,737
GROSS PROFIT		108,004			45,348			184,472			96,915
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		8,376			8,046			20,495			16,842
OPERATING INCOME		99,628			37,302			163,977			80,073
INTEREST EXPENSE - Net		(8,647	)		(6,242	)		(15,202	)		(12,708	)
NET GAIN (LOSS) ON FORWARD CONTRACTS		(30,456	)		24,496			(317,216	)		1,001
OTHER INCOME (EXPENSE) - Net		37			(472	)		(124	)		(65	)
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF JOINT VENTURES		60,562			55,084			(168,565	)		68,301
INCOME TAX (EXPENSE) BENEFIT		(19,109	)		(17,880	)		65,247			(22,733	)
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF JOINT VENTURES		41,453			37,204			(103,318	)		45,568
EQUITY IN EARNINGS OF JOINT VENTURES		4,347			3,540			7,547			6,906
NET INCOME (LOSS)	$	45,800		$	40,744		$	(95,771	)	$	52,474
EARNINGS (LOSS) PER COMMON SHARE
Basic - Net income (loss)	$	1.41		$	1.27		$	(2.96	)	$	1.63
Diluted - Net income (loss)	$	1.35		$	1.27		$	(2.96	)	$	1.63
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic		32,419			32,140			32,341			32,099
Diluted		34,297			32,196			32,341			32,162

Century Aluminum Company

Consolidated Balance Sheets

(Dollars in Thousands)

(Unaudited)

	June 30,			December 31,
ASSETS	2006			2005
Current Assets:
Cash	$	29,175		$	17,752
Restricted cash		6,029			2,028
Accounts receivable - net		118,191			83,016
Due from affiliates		15,635			18,638
Inventories		132,956			111,436
Prepaid and other current assets		21,375			23,918
Deferred taxes - current portion		53,281			37,705
Total current assets		376,642			294,493
Property, plant and equipment - net		1,155,732			1,070,158
Intangible asset - net		68,118			74,643
Goodwill		94,844			94,844
Other assets		251,358			143,293
Total	$	1,946,694		$	1,677,431
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade	$	59,291		$	61,919
Due to affiliates		221,650			158,682
Accrued and other current liabilities		52,691			53,715
Long term debt - current portion		16,093			581
Accrued employee benefits costs - current portion		9,333			9,333
Convertible senior notes		175,000			175,000
Industrial revenue bonds		7,815			7,815
Total current liabilities		541,873			467,045
Senior unsecured notes payable - net		250,000			250,000
Nordural debt		283,636			230,436
Revolving credit facility		-			8,069
Accrued pension benefit costs - less current portion		10,904			10,350
Accrued postretirement benefits costs - less current portion		103,245			96,660
Due to affiliates - less current portion		592,550			337,416
Other liabilities		28,420			28,010
Deferred taxes		16,890			16,890
Total noncurrent liabilities		1,285,645			977,831
Shareholders' Equity:
Common stock (one cent par value, 100,000,000 shares authorized; 32,426,835
shares outstanding at June 30, 2006 and 32,188,165 at December 31, 2005)		324			322
Additional paid-in capital		429,797			419,009
Accumulated other comprehensive loss		(119,816	)		(91,418	)
Accumulated deficit		(191,129	)		(95,358	)
Total shareholders' equity		119,176			232,555
Total	$	1,946,694		$	1,677,431

Century Aluminum Company

Consolidated Statements of Cash Flows

(Dollars in Thousands)

(Unaudited)

	Six months ended
	June 30,
	2006			2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(95,771	)	$	52,474
Adjustments to reconcile net income to net cash provided by
operating activities:
Unrealized net (gain) loss on forward contracts		283,573			(3,429	)
Depreciation and amortization		32,224			28,050
Deferred income taxes		(65,247	)		22,733
Pension and other post retirement benefits		7,139			7,421
Stock-based compensation		3,872			-
Excess tax benefits from share based compensation		(1,090	)		-
(Gain) loss on disposal of assets		45			(4	)
Non cash loss on early extinguishment of debt		-			253
Change in operating assets and liabilities:
Accounts receivable - net		(35,175	)		(24,999	)
Due from affiliates		3,003			327
Inventories		(17,880	)		6,834
Prepaid and other current assets		(3,459	)		(5,712	)
Accounts payable, trade		(710	)		(6,745	)
Due to affiliates		2,173			(9,548	)
Accrued and other current liabilities		(33,802	)		(3,948	)
Other - net		(11,605	)		(4,983	)
Net cash provided by operating activities		67,290			58,724
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(7,568	)		(5,481	)
Nordural expansion		(109,002	)		(113,654	)
Proceeds from sale of property, plant and equipment		10			59
Restricted cash deposits		(4,001	)		(350	)
Business acquisitions, net of cash acquired		-			(7,000	)
Net cash used in investing activities		(120,561	)		(126,426	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of long-term debt		69,000			145,378
Repayment of long-term debt		(288	)		(83,023	)
Net repayments under revolving credit facility		(8,069	)		-
Financing fees		-			(4,617	)
Excess tax benefits from share based compensation		1,090			-
Dividends		-			(16	)
Issuance of common stock		2,961			986
Net cash provided by financing activities		64,694			58,708
NET INCREASE (DECREASE) IN CASH		11,423			(8,994	)
CASH, BEGINNING OF PERIOD		17,752			44,168
CASH, END OF PERIOD	$	29,175		$	35,174

Century Aluminum Company

Selected Operating Data

(Unaudited)

SHIPMENTS - PRIMARY ALUMINUM

	Direct (1)									Toll
				(000)									(000)			(000)
	Metric Tons			Pounds			$/Pound			Metric Tons			Pounds			Revenue
2006
2nd Quarter		132,590			292,311		$	1.12			39,125			86,255		$	77,702
1st Quarter		132,378			291,843		$	1.03			24,573			54,174		$	45,166
2005
2nd Quarter		130,974			288,748		$	0.86			23,025			50,761		$	34,174
1st Quarter		130,083			286,783		$	0.88			22,756			50,168		$	33,372
(1) Does not include Toll shipments from Nordural
		2006(1) (2)			2007(2)			2008(2)			2009(2)			2010(2)			2011-2015(2)
Base Volume
Pounds (000)		197,267			374,565			240,745			231,485			231,485			826,733
Metric Tons		89,479			169,900			109,200			105,000			105,000			375,000
Percent of estimated capacity		24	%		22	%		14	%		13	%		13	%		9	%
Potential Additional Volume(2)
Pounds (000)		27,778			111,113			220,903			231,485			231,485			826,733
Metric Tons		12,600			50,400			100,200			105,000			105,000			375,000
Percent of estimated capacity		3	%		7	%		12	%		13	%		13	%		9	%
(1) The forward priced sales in 2006 exclude July 2006 shipments to customers that are priced based upon the prior month's market price.
(2) Certain financial sales contracts included in the forward priced sales base volume for the period 2006 through 2015 contain clauses that trigger potential additional sales volume when the market price for a contract month is above the base contract ceiling price. These contracts will be settled monthly and, if the market price exceeds the ceiling price for all contract months through 2015, the potential additional sales volume would be equivalent to the amounts shown above.