Century Aluminum Reports Third Quarter 2009 Earnings

MONTEREY, CA -- Century Aluminum Company reported net income of $40.1 million (.45 per basic and diluted common share) for the third quarter of 2009. In the third quarter of 2008, the company reported net income of $35.8 million (.58 per basic and .55 per diluted common share). 

Sales in the third quarter of 2009 were $228.7 million, compared with $552.2 million in the third quarter of 2008. Shipments of primary aluminum for the quarter totaled 146,245 tons compared with 203,618 tons in the year-ago quarter.

For the first nine months of 2009, the company reported a net loss of $181.6 million ($2.56 per basic and diluted common share). These results were negatively impacted by a net after-tax charge of $35.3 million for costs associated with production curtailments at U.S. smelters and a $73.2 million impairment charge associated with the divestiture of our Gramercy, LA and St. Ann, Jamaica equity investments. Results for the nine month period were positively impacted by a net after-tax benefit of $57.4 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 the Hawesville, KY smelter and a $7.5 million tax benefit related to the release of tax reserves no longer required. 

For the first nine months of 2008, the company reported a net loss of $201.6 million ($4.66 per basic and diluted common share). Results were negatively impacted by a net after-tax charge of $466.2 million for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. Results for the nine month period were positively impacted by net tax benefits of $15.9 million for various non-recurring items.

Sales in the first nine months of 2009 were $642.4 million compared with $1,568.6 million in the same period of 2008. Shipments of primary aluminum for the first nine months of 2009 were 457,426 tons compared with 601,511 tons for the comparable 2008 period.

"Since the onset of the financial crisis, we have focused on the critical goals of risk reduction and liquidity enhancement," commented Logan W. Kruger, president and chief executive officer. "I am pleased with our meaningful accomplishments toward these objectives. Cost reduction efforts at Grundartangi and Hawesville have yielded tangible results. The agreements underlying Hawesville's new long-term power contract protect the company during these uncertain times and increase our options for this smelter over the longer-term. The Public Service Commission in West Virginia also approved a one year extension on our special rate power contract at Ravenswood, preserving our options at that smelter while we work through improving its cost structure. Importantly, we have reduced our 2011 debt repayment obligation to a manageable level, while deleveraging the balance sheet in the process. Century's financial position is meaningfully stronger today as a result of these efforts."

"Looking ahead, we note some improvement in global economic conditions and are watching closely for consistency in these data," concluded Kruger. "Demand for industrial metals has strengthened in China and in certain other developing regions, and appears to have stabilized in the developed economies. However, capacity restarts and persistently high inventory levels require us to remain cautious. We will maintain an appropriate balance between preserving financial strength and flexibility in the short-term and positioning the company for longer-term growth when we believe conditions are appropriate."

Century's corporate offices are located in Monterey, California. The company has a major production facility in Ravenswood, W.Va.