Century Aluminum(CENX)2024-05-01 12:02Financial Performance - Net sales decreased by $62.9 million for the three months ended March 31, 2024, primarily due to unfavorable volume and sales mix of $53.4 million and unfavorable LME and regional premium price realizations of $49.4 million [165]. - For the three months ended March 31, 2024, total net sales were $489.5 million, a decrease from $512.3 million in the same period of 2023, reflecting a decline of approximately 4.4% [187]. - The company reported a gross profit of $16.5 million for the three months ended March 31, 2024, down from $39.4 million in the same period of 2023, indicating a decrease of approximately 58% [189]. - Gross profit decreased by $22.9 million for the three months ended March 31, 2024, compared to the previous quarter, primarily due to a decrease of $44.6 million from the IRA Section 45X credit [209]. - Net income attributable to Century stockholders for the three months ended March 31, 2024, was $246.8 million, a significant increase from $30.0 million in the same period of 2023 [187]. Production and Sales - Shipments of primary aluminum in the U.S. totaled 97,602 tonnes for the first quarter of 2024, generating sales of $258.1 million [164]. - The average LME price for primary aluminum decreased to $2,199 per tonne for the three months ended March 31, 2024, compared to $2,399 per tonne for the same period in 2023, reflecting a decline of approximately 8.3% [162]. - The average Midwest premium (MWP) for aluminum sold in the U.S. decreased to $402 per tonne for the three months ended March 31, 2024, down from $618 per tonne in the same period of 2023 [162]. - The acquisition of a 55% interest in Jamalco is expected to contribute to alumina sales, which added $40.1 million to net sales for the three months ended March 31, 2024 [165]. Costs and Expenses - The company recognized $11.9 million as a reduction in cost of goods sold and $0.7 million as a reduction in selling, general, and administrative expenses due to a tax credit equal to 10% of eligible domestic production costs under the Inflation Reduction Act [158]. - Selling, general and administrative expenses increased by $6.0 million for the three months ended March 31, 2024, compared to the previous quarter, mainly driven by share-based compensation costs [210]. - The company incurred higher production costs of alumina due to inefficiencies from power disruptions, with a cumulative impact of approximately $38.8 million from the second quarter of 2023 through March 31, 2024 [203]. Cash Flow and Liquidity - Net cash used in operating activities was $(14.8) million for the three months ended March 31, 2024, compared to $(0.2) million in the same period of 2023 [196]. - The increase in net cash used in operating activities during the three months ended March 31, 2024, was primarily driven by timing of payments and receipts [216]. - As of March 31, 2024, the company had cash and cash equivalents of approximately $93.5 million and total liquidity of $302.0 million [214]. - The company has $208.5 million of net availability under its credit facilities as of March 31, 2024, after considering outstanding borrowings and letters of credit [198]. - The U.S. revolving credit facility had a borrowing availability of $141.2 million, with outstanding borrowings of $17.0 million as of March 31, 2024 [219]. - The Casthouse Facility had $130.0 million in outstanding borrowings as of March 31, 2024, with repayments scheduled to begin in July 2024 [225]. Contracts and Obligations - The company has a contingent obligation of $31.2 million related to a long-term power contract, which may require future payments depending on aluminum prices and operational levels [168]. - The company is currently negotiating a new labor contract with the Federation for the Metal and Electrical Industry, with the current agreement effective through May 31, 2024 [166]. Gains and Losses - A bargain purchase gain of $245.9 million was recognized in the consolidated statements of operations for the acquisition of Jamalco, which was finalized on May 2, 2023 [192]. - A bargain purchase gain of $245.9 million was recognized for the acquisition of a 55% interest in Jamalco for the three months ended March 31, 2024 [212]. - The net gain on forward and derivative contracts was $7.4 million for the three months ended March 31, 2024, a change of $65.0 million compared to a loss in the same period of 2023 [191]. - The company reported a net gain on forward and derivative contracts of $7.4 million for the three months ended March 31, 2024, a decrease of $4.5 million from the previous quarter [210]. Compliance and Regulations - The company was in compliance with all covenants related to its credit facilities as of March 31, 2024 [221]. - Income tax changed to an expense of $0.5 million for the three months ended March 31, 2024, compared to a benefit of $0.2 million for the same period in 2023 [213].