Century Aluminum Company (NASDAQ: CENX) Q2 2025 Earnings | 08/08/2025

12 days ago

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Earnings Calls

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Summary of Century Aluminum Company Q2 2025 Earnings Call

Date: August 8, 2025
Participants:

Jesse Gary (President & CEO)
Peter Tripkoski (EVP & CFO)

Key Highlights:

1. Financial Performance (Q2 2025):

Revenue: $628M (down $6M QoQ) due to lower third-party alumina sales, offset by higher shipments and metal pricing.
Adjusted EBITDA: $74M (down $4M QoQ), impacted by:
- Higher Midwest premiums ($850/ton, up $247 QoQ) from Section 232 tariff hikes (10% → 25% in March).
- Lower LME prices ($2,542/ton, down $11 QoQ) and European premiums ($220/ton, down $115 QoQ).
Net Loss: $5M ($0.05/share); adjusted net income of $30M ($0.30/share).
Liquidity: $363M (up $24M QoQ); cash balance of $41M.

2. Operational & Strategic Updates:

Mount Holly Restart:
- 50,000 metric tons of idle capacity to restart (total 220,000 tons/year by Q2 2026).
- $50M investment ($4M/month); expected payback by end of 2026.
- Supported by Section 232 tariffs (now 50%) and strong domestic demand.
Section 232 Impact:
- Tariffs drove spot Midwest premium to $1,600/ton (72¢/lb).
- Full benefit to flow into Q4 2025 results.
Refinancing:
- Issued $400M senior secured notes (6.875%, maturing 2032) to replace higher-cost debt, lowering interest expenses.
45X Tax Credits:
- $195M receivable (2023–H1 2025); FY23 payment expected "imminently."
- Mount Holly expansion to qualify for additional credits.

3. Market Outlook:

Global Deficit: Tight supply (China near 45M-ton cap) and robust demand to sustain deficits.
U.S. Demand: Billet shipments up 8% YoY; value-added premiums to rise in 2026.
Europe: Weaker market but billet premiums firming.

4. Project Pipeline:

New U.S. Smelter: Site selection and energy agreements expected by late 2025/early 2026.
Hawesville Strategic Review: Final negotiations underway; decision by end of Q3.
Jamalco Expansion: Steam turbine installation (Q1 2026) to cut power costs and boost output to 1.4M tons/year.

5. Q3 2025 Guidance:

Adjusted EBITDA: $115–125M (up ~$50M QoQ), driven by:
- Lagged Midwest premium ($1,450/ton, up $600 QoQ).
- Lower energy costs (natural gas at $3/MMBTU).
Q4 Upside: Spot LME ($2,600+) and Midwest premium ($1,600) could push EBITDA to $140–150M.

Key Takeaways:

Tariff-Driven Growth: Section 232 tariffs (now 50%) are reshaping U.S. aluminum, with Century as the largest domestic producer.
Expansion Mode: Mount Holly restart and new smelter to double U.S. production by 2030.
Margin Resilience: Higher premiums offset LME volatility; 45X credits bolster cash flow.
Debt Discipline: Refinancing extends maturities and reduces interest costs.

About this video

Century Aluminum Company reported mixed financial results for the second quarter of 2025. Net sales came in at $628.1 million, exceeding analyst expectations and reflecting resilience in core operations. Aluminum shipments increased 4% sequentially to 175,741 tonnes, underscoring steady production and market demand. However, the company posted a net loss attributable to stockholders of $4.6 million ($0.05 per share), a sharp reversal from net income of $29.7 million in the prior quarter, primarily due to higher raw material costs, operating expenses, and derivative losses. Adjusted net income was $30.4 million ($0.30 per share), while adjusted EBITDA reached $74.3 million. Key operational highlights included the restart announcement of 50,000 metric tons of capacity at the Mt. Holly smelter, expected to boost U.S. primary aluminum production by nearly 10%. Century also successfully refinanced its senior notes, lowering the interest rate to 6.875% and extending maturity to 2032, a move aimed at improving long-term liquidity and reducing financing costs. Strategic factors such as Section 232 tariff increases to 25% in March and 50% from June are forecasted to favor domestic aluminum producers, with the benefit expected to be more pronounced in Q3 and onward. Management projects Q3 2025 adjusted EBITDA between $115 million and $125 million, driven by higher realized Midwest regional premiums and tariff protections. Risks highlighted by management include continued volatility in metal prices, elevated raw material and power costs, as well as uncertainties around global supply-demand trends. Liquidity remains solid at $362.5 million, comprising $40.7 million in cash and $321.8 million in borrowing availability. About Inside Ticker: Inside Ticker delivers timely, in-depth financial news and earnings analysis to empower investors with actionable insights on global companies across sectors. For comprehensive video analysis and real-time updates, visit https://www.insideticker.com/. #CenturyAluminum #CENX #Q22025 #Earnings #FinancialResults #Revenue #NetLoss #EPS #AdjustedEBITDA #Aluminum #Commodities #MtHolly #SmelterRestart #Section232 #Tariffs #Shipments #CapacityExpansion #IndustrialMetals #USManufacturing #Liquidity #Refinancing #DebtManagement #OperationalUpdate #InvestorUpdates #NASDAQ #MetalsAndMining #MarketTrends #ProductionGrowth #FinancialOutlook #CommodityMarkets #EnergyCosts #InsideTicker

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