Century Aluminum reports improved financial results in Q2 2018Volker Karow
Century Aluminum Company recently posted net income of USD19.4m for Q2 2018. Results were negatively impacted by USD8.5m related to the equipment failure at Sebree and USD3.0m in expenses related to the Hawesville restart project. This result compares to a net loss of USD0.3m for Q1 2018. Adjusted Ebitda was USD54.5m, up 67% from Q1 2018. The increase was primarily attributable to higher LME and regional premiums and lower realized alumina costs. Sales were USD470m (+3.4%). Shipments of primary aluminium were 180,220 tonnes (-3.7%), reflecting the lower production volume due to the equipment failure at the Sebree smelter.
Michael Bless, president and CEO, commented: “Industry conditions remain generally favourable. Downstream demand in most sectors and regions, especially in the US, continues to be strong, producing attractive growth in primary metal consumption. Consensus forecasts predict a global deficit for primary aluminium in 2018, despite a surplus in China of nearly 1m metric tonnes. We see this environment, buttressed by accommodative global growth, continuing for the foreseeable future.”
He continued: “These attractive trading conditions continue amidst some recent pricing volatility. The alumina price remains well above its fundamentally supported level due to short-term concerns over a small number of actual and potential supply disruptions. The aluminium price itself has weakened over the last two months in concert with other commodities and risk assets; given the strong fundamental global economic environment, this trend should reverse reasonably soon. In the US, the Section 232 relief implemented by the Trump administration has resulted in significant investment in the primary industry; we currently estimate that by the end of 2018, US primary aluminium production will have increased by around 60% from 2017 levels. Given this success, we remain confident that the administration will continue to reinforce its consistent objective of supporting the restart of US primary aluminium capacity and the long-term competitiveness of the industry.”
"We continue to move forward with the restart of our idled capacity"
“In this context, we continue to move forward with the restart of our idled capacity,” he went on. “In June we began energizing cells in the first of the three curtailed potlines at Hawesville, and are hard at work rebuilding cells in the other two lines. We are proud that this large and complex project has thus far been successfully achieved with no significant safety incidents; the safety of our employees and contractors will continue to be our first priority. The restart project remains on schedule and within budget; it continues to represent an attractive investment for our shareholders, even in the present slightly weaker pricing environment. We have also prepared the potline at Sebree for restart after the unfortunate power equipment failure in late May, and have begun restarting these cells. We expect this process to be completed by the end of the third quarter.”