Century Aluminum(US:CENX)2023-08-10 02:00Financial 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]