Century Aluminum Company (CENX) Q4 2023 earnings summary

Executive summary

• Q4 shipments rose to 173,871 tonnes from 171,995 in Q3; adjusted EBITDA attributable to stockholders increased to $57.1M from $9.3M.

• Q4 reported net income was $30.0M and adjusted net income was $40.0M; FY23 reported net loss was $43.1M and adjusted net income was $30.7M.

• Profitability benefited from a $59.3M IRA 45X credit; Grundartangi had a small power-related curtailment expected to end by Apr 30.

• Strategic priorities advanced with a 55% Jamalco acquisition, a three-year Mt. Holly power agreement and a five-year Sebree labor contract.

Financial highlights

• Q4 net sales were $512.3M, down 6% sequentially, primarily due to lower realized aluminum prices.

• FY23 net sales were $2,185.4M, down from $2,777.3M in 2022; lower realized aluminum prices and shipments drove the decline.

• FY23 primary aluminum shipments were 700,680 tonnes, down 9% YoY; Q4 shipments rose 1% sequentially to 173,871 tonnes.

• FY23 operating cash flow was $105.6M; $95.0M was used for property, plant and equipment purchases.

• Q4 cash was $88.8M, borrowing availability $223.7M and total liquidity $312.5M.

Outlook and guidance

• Q1 2024 adjusted EBITDA guidance was $5M–$15M; improved raw-material costs were expected to be offset by lower value-added product premiums.

• FY24 shipment assumption was 700K tonnes; expected D&A was $80–$90M, SG&A $40–$45M and interest expense $35–$40M.

• FY24 cash-flow assumptions included sustaining capex of $10–$15M, Jamalco capex of $10–$15M and Iceland casthouse spend of $15–$20M.

• Potential eligibility of direct and indirect material costs could add $50–$55M annually to the IRA credit; pro forma FY23 adjusted EBITDA was $170–$175M.

• IRA credit estimates assume current production levels and may vary with LME, premiums, energy and raw-material prices; Q1 estimates used prices as of Feb 16, 2024.