Century Aluminum Company (NASDAQ:CENX) Q3 2023 Earnings Call Transcript November 8, 2023 5:00 PM ET Company Participants Ryan Crawford - Financial Planning & Analysis and IR Manager Jesse Gary - President and CEO Jerry Bialek - EVP and CFO Conference Call Participants Ryan Crawford - Financial Planning & Analysis and IR Manager Jesse Gary - President and CEO Jerry Bialek - EVP and CFO Operator Good afternoon, and thank you for attending today's Century Aluminum Third Quarter Earnings Call. My name is Jason, ...

Table of Contents (Nasdaq Global Select Market) Century Aluminum Company (Exact name of registrant as specified in its charter) Delaware 13-3070826 Suite 1000 (Zip Code) Securities registered pursuant to Section 12(b) of the Act: Title of each class: Trading Symbol(s) Name of each exchange on which registered: Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "large accelerated file ...

Financial Data and Key Metrics Changes - The company reported net sales of $576 million for Q2 2023, a 4% sequential increase [18] - Adjusted EBITDA attributable to the company was $30 million, an improvement of $6 million sequentially [19][32] - Adjusted net income was $16 million or $0.16 per share, an improvement of $27 million compared to the prior quarter [45] Business Line Data and Key Metrics Changes - Jamalco's operations are being integrated into the company's system, with expectations to restore the refinery to its design capacity of 1.4 million tons over the next several years [8][28] - The refinery returned to full and stable operations in July after disruptions in June due to adverse weather [34] - The company expects Jamalco to supply about 40% of its aluminum mix for the remainder of the year [25] Market Data and Key Metrics Changes - The global aluminum market shifted from a slight deficit to a slight surplus due to Chinese supply gains and short-term demand weakness [10] - The three-month aluminum price averaged $2,286 per ton in Q2, down about $150 from Q1 levels [37] - Global days of inventory remain near 50 days, with inventories historically low despite a growing number of consumers rejecting Russian metal [40] Company Strategy and Development Direction - The company is focused on disciplined cost management and operational improvements to position itself for a market rebound [12] - The Grundartangi casthouse project is nearing completion, expected to deliver low-carbon natural billet to European customers in Q1 next year [71] - The company aims to enhance its value-added product sales, particularly in automotive and renewable energy markets [38] Management's Comments on Operating Environment and Future Outlook - Management noted that persistent inflation and rising interest rates have cooled demand in the short term [11] - The company expects Q3 adjusted EBITDA to be in the range of $10 million to $20 million, reflecting lower raw material costs [52] - Management remains optimistic about the future, emphasizing the importance of operational performance and cost discipline [54][72] Other Important Information - The company incurred a $6 million loss at Jamalco due to downtime and lost production from a weather event [49] - The MISO capacity auction returned to normalized levels, providing a $20 million year-over-year benefit [21][60] - The company expects to close a land sale transaction for approximately $25 million in Q3 [46] Q&A Session Summary Question: Expectations for Jamalco's financial impact - Management confirmed that Jamalco is expected to be accretive to financial results starting in Q3, contingent on spot prices remaining favorable [29][74] Question: Details on the MISO auction and implications - The MISO capacity auction returned to normalized levels, with capacity prices less than $10 per megawatt-day for the upcoming 12-month period, providing a benefit of about $20 million [60][61][76] Question: Impact of capacity prices on business - Management indicated that the normalized capacity prices will positively impact the company's operations, particularly in Kentucky plants [59][76]

Nord Pool4 +/- $1/MWh 1 0.1 Coke5 +/- $10/MT 3 3 Caustic Income stmt: 5-6 month lag Cash flow: ~1 month lag HFO / Nat Gas 1-2 month lag Alumina Jamalco sourced (~40%), % LME (~30%), API (~15%), and Fixed (~15%) KY – Market-based power (Indiana Hub) plus delivery Iceland – ~70% LME dependent / ~20% market-based power (Nord Pool) plus transmission / ~10% fixed rate plus transmission Caustic Soda – Index, direct counterparty pricing HFO – Index, direct counterparty pricing Natural Gas – Henry Hub plus delivery ...

26 14. Components of Net Periodic Benefit Cost We have entered into financial contracts to hedge a portion of Grundartangi's exposure to the Nord Pool power market ("Nord Pool power price swaps"). All of the Nord Pool power price swaps are expected to cash settle monthly through During the third quarter of 2022, we entered certain floating Nord Pool financial contracts to unwind a portion of our fixed contract position as a result of the recent power agreement amendment, making us predominantly hedged again ...

Century Aluminum Company (NASDAQ:CENX) Q1 2023 Earnings Conference Call May 8, 2023 5:00 PM ET Company Participants Peter Trpkovski - VP, Finance & IR Jesse Gary - President and CEO Jerry Bialek - EVP and CFO Conference Call Participants Lucas Pipes - B. Riley Securities Timna Tanners - Wolfe Research John Tumazos - John Tumazos Very Independent Research Katja Jancic - BMO Capital Markets Operator Good afternoon. Thank you for attending today's Century Aluminum Company First Quarter 2023 Earnings Conference ...

Cautionary Statement 1 • Jesse Gary – President and Chief Executive Officer • Shelly Harrison – Senior Vice President, Finance and Treasurer 2 Industry Fundamentals • China supply cuts due to Yunnan region water shortages; additional cuts in EU announced • Energy and carbon costs continue decline • Indiana Hub prices QTD ~$33/MWh; down > 50% from prior year • Nord Pool prices QTD ~$86/MWh; hedged 95% at $30/MWh • Coke prices QTD ~$633/MT U.S. Gulf FOB basis; down ~10% from prior year • Jamalco integration u ...

Vlissingen Facility Agreement On December 9, 2022, Vlissingen entered into a Facility Agreement with Glencore International AG pursuant to which Vlissingen may borrow from time to time up to $90 million (the "Vlissingen Facility Agreement") in one or more loans payable on December 2, 2024, the maturity date of the Vlissingen Facility Agreement. As of March 31, 2023, there were no outstanding borrowings under the Vlissingen Facility Agreement. Surety Bond Facility As part of our normal business operations, w ...

Market Conditions and Price Volatility - The overall price of primary aluminum is influenced by three components: base commodity price, regional premium, and value-added product premium, which can lead to significant volatility [77]. - The company experienced a tripling of Nord Pool power prices from January 2021 to December 2021 due to low reservoir levels and natural gas inventory in Europe [82]. - The company faces risks from excess capacity and overproduction in the aluminum market, which could lead to price deterioration and adversely impact operating results [80]. - Increased energy costs represent a significant component of the cost of goods sold, impacting profitability if not aligned with aluminum prices [81]. - The alumina index price reached a high of $710 per tonne in April 2018, while the average price was $362 per tonne for 2022, indicating significant price volatility [102]. - Changes in trade laws and regulations could adversely affect the company's sales margins and profitability, particularly regarding import tariffs on primary aluminum [154]. Operational Challenges and Production Capacity - The restart of the Mt. Holly smelter is contingent on a power agreement allowing production at 75% capacity, with profitability subject to market conditions [95]. - The Hawesville smelter operations were fully curtailed in Q3 2022, with any potential restart dependent on external market conditions [96]. - Disruptions in power supply can lead to reduced production volumes and increased costs for restarting operations [84]. - The Casthouse Project at Grundartangi will have a production capacity of 150,000 tonnes and is expected to start in Q1 2024, but completion is subject to various risks [99]. - The company completed a project in Q2 2022 to restart approximately 172,000 tonnes of production capacity at Mt. Holly, achieving 75% of its maximum capacity [58]. - A multi-year project at the Grundartangi smelter aims to increase annual production capacity to approximately 325,000 tonnes [59]. - The new casthouse project at Grundartangi is expected to produce up to 150,000 tonnes of billet starting in Q1 2024, focusing on low-carbon aluminum [59]. Financial Position and Debt Management - As of December 31, 2022, the company had approximately $527.7 million in outstanding debt, including $250.0 million in 7.5% senior secured notes due 2028 and $86.3 million in convertible senior notes due 2028 [126]. - The company may face significant borrowing costs and less favorable credit terms due to a deterioration in its financial condition or credit rating, which could limit access to credit and capital markets [124]. - The company is subject to interest rate risk, as its existing debt instruments and future borrowings may be at variable interest rates, potentially increasing debt service obligations [128]. - The company relies on intercompany transfers from subsidiaries to meet debt service obligations, which depend on the subsidiaries' operating results and applicable laws [130]. - The conversion of convertible notes may dilute stockholder ownership and could adversely affect the market price of the company's common stock [132]. Customer Concentration and Supplier Risks - Approximately 72% of consolidated net sales for the year ended December 31, 2022, were derived from two major customers, highlighting customer concentration risk [107]. - The company relies on a limited number of suppliers for raw materials, which could lead to production inefficiencies or increased costs if supply agreements are not renewed on favorable terms [101]. - The company expects to sell a substantial portion of its 2023 production to Glencore, maintaining a concentrated customer base under short-term contracts [35]. - Approximately 60% of the company's consolidated sales for the year ended December 31, 2022, were derived from Glencore and approximately 12% from Southwire [34]. Labor and Operational Efficiency - Labor agreements at key facilities are set to expire in the near future, with potential for strikes or work stoppages if negotiations are unsuccessful [121]. - Increased labor costs and turnover rates were experienced in 2022, impacting operational efficiency and financial performance [123]. - Approximately 43% of the U.S. workforce is represented by labor unions, with various labor agreements in place across different facilities [54]. Risk Factors and External Influences - The company faces risks from international operations, including political and economic instability, which could adversely affect financial results [112]. - Unpredictable events, such as natural disasters, could disrupt operations and lead to significant financial losses [114]. - The ongoing impact of the COVID-19 pandemic continues to affect supply chains and operational results, with potential for future disruptions [89]. - The company faces risks from cybersecurity incidents, which could disrupt operations and adversely impact financial results [139]. - Climate change regulations may increase operating costs, particularly related to electricity, which is the company's largest operating cost [146]. - The company currently receives approximately 70% of needed emission allowances for its smelter free of charge, but changes in regulations could increase costs [147]. - The potential physical impacts of climate change on operations are uncertain and could adversely affect the company's financial position and results of operations [148]. Insurance and Risk Management - The company maintains property and business interruption insurance, but coverage may not be sufficient to cover all losses from operational disruptions [87]. - Hedging activities may not effectively reduce risk exposure, and liquidity may be impacted by collateral margin calls [120]. Strategic Initiatives and Acquisitions - The company has a history of making acquisitions and plans to continue this strategy, which may involve risks such as unidentified liabilities and integration challenges [159]. - The company benefits from duty-free access to major customer markets, including the U.S. and E.U., due to existing trade laws [61]. - The proximity of production facilities to major customer markets allows for short, reliable supply chains, enhancing competitive advantage [62]. Legal and Regulatory Environment - The company is subject to various environmental laws and regulations that may impose significant costs and liabilities, potentially affecting its financial position and operations [150]. - The company is subject to litigation and legal proceedings, which may have a material adverse effect on its financial position and results of operations [155]. - Glencore beneficially owns approximately 42.9% of the company's outstanding common stock, which may influence the company's operations and decisions [160].

Century Aluminum Company (NASDAQ:CENX) Q4 2022 Earnings Conference Call February 23, 2023 5:00 PM ET Company Participants Peter Trpkovski - VP, Finance & IR Jesse Gary - President and Chief Executive Officer Jerry Bialek - Executive Vice President and Chief Financial Officer Shelly Harrison - Senior Vice President, Finance and Treasurer Conference Call Participants David Gagliano - BMO Capital John Tumazos - Very Independent Research Lucas Pipes - B. Riley Securities Operator Good afternoon. Thank you for a ...