Century Aluminum(US:CENX)2026-02-19 23:02Financial Data and Key Metrics Changes - In Q4, consolidated shipments totaled approximately 140,000 tons, a decrease from the prior quarter due to the line loss in Iceland [18] - Net sales for the quarter were $634 million, a $2 million increase sequentially, primarily due to higher realized LME and Midwest Premium, partially offset by lower shipments [18] - Net income was reported at $1.8 million or $0.02 per share, with adjusted net income at $128 million or $1.25 per share, excluding exceptional items [19] - Adjusted EBITDA for Q4 was $171 million, an increase of $70 million from the previous quarter, driven by higher LME and regional premiums [19][20] Business Line Data and Key Metrics Changes - Operational performance at Mt. Holly improved, contributing to increased volume and lower operating costs, which improved Adjusted EBITDA by $10 million [22] - Grundartangi smelter is expected to return to close to full production by the end of July, with repairs to damaged transformers allowing for an earlier restart than anticipated [12][13] Market Data and Key Metrics Changes - Aluminum prices rose to a four-year high of $3,325 in January, with spot prices around $3,100 [14] - The Midwest premium climbed to $1.04 per pound, while the European Duty Paid Premium reached approximately $365 per ton [16] Company Strategy and Development Direction - The company is focused on expanding U.S. aluminum production, with significant investments planned for the Mt. Holly and Oklahoma smelter projects [4][5] - The Oklahoma Smelter project, in partnership with EGA, aims to utilize state-of-the-art EX smelting technology, expected to improve production capacity by over 20% [6][7] - The redevelopment of the Hawesville site into a digital infrastructure campus is expected to create job opportunities and generate significant cash flow for the company [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand conditions and the potential for significant global aluminum deficits in 2026, which could benefit the company [33] - The completion of the TG-4 power turbine at Jamalco is expected to lower energy costs and improve the overall cost structure [35] - The company anticipates generating significant cash flow from operations, which will support capital allocation strategies, including potential shareholder returns [67] Other Important Information - The company received a $200 million cash payment from the sale of the Hawesville site and retains a 6.8% interest in the new data center [26] - Insurance coverage for business interruption losses in Iceland has been confirmed, with expected reimbursements of approximately $40 million in Q1 [23][24] Q&A Session Summary Question: Clarification on Q1 guidance and EBITDA recognition from Grundartangi - Management confirmed that the Q1 guidance includes the EBITDA loss margin from Grundartangi [37] Question: Earnings power in varying price environments and capital allocation - Management provided insights on potential earnings power based on current and future price environments, indicating a significant uplift in revenue from current spot prices [39][40] Question: Progress on energy contracts for the Oklahoma project - Management is finalizing the power contract with EGA and PSO, emphasizing the importance of an attractive energy contract for project returns [44][46] Question: Next milestones for the new smelter - Key milestones include finalizing the power contract, completing engineering work with Bechtel, and making a final investment decision by Q4 [50] Question: Capacity utilization expectations for Grundartangi - Until line two is operational, Grundartangi is expected to produce about one-third of its normal volume [58] Question: Use of proceeds from the Hawesville sale - Management indicated that the stake in the data center provides liquidity options, but significant cash flow from operations should cover financing needs for the new smelter [60][62]