CENTURY ALUMINUM CO Q3 FY2024 earnings call

• Safety incident at Mt. Holly smelter was reported, emphasizing the need for operational improvements. - Strong aluminum and aluminum market conditions with improving realized prices and falling carbon prices. - Global aluminum demand at record levels in 2024, expected to accelerate in 2025. - Supply challenges in aluminum with China near production cap and limited new projects outside China. - Bauxite and aluminum markets impacted by supply disruptions, especially from Guinea. - Strong performance across smelters in Q3; Hawesville facility is being evaluated for strategic alternatives. - Jamalco refinery recovered from Hurricane Beryl, with port repairs completed. - Final regulations on Section 45X provide additional clarity on eligible costs for production tax credit, with potential for increased benefits if alumina is included.

In the third quarter, Century Aluminum generated adjusted EBITDA of $104 million. Net sales for the quarter were $539 million, a decrease of $22 million sequentially. Global shipments were approximately 169,000 tons. Adjusted net income was $60 million, or $0.63 per share. Century no longer has exposure to spot aluminum prices following the acquisition of Jamalco, with smelters' aluminum requirements sourced from Jamalco or long-term LME link supply contracts. Major raw material price inputs like natural gas are constructive, with natural gas storage levels well situated for winter.

• Q4 adjusted EBITDA expected to be in the range of $70 million to $80 million. - Lagged LME of $2,430 per ton expected to be down about $20 vs Q3; U.S. Midwest premium forecast $425 per ton, up $5; European delivery premium expected $340 per ton, up about $5 vs Q3. - Power prices expected to have zero to $5 million EBITDA increase in Q4. - Current spot aluminum prices above $2,600 per ton won't positively impact financial results until Q1 2025; if alumina is included in 45X, annual benefit could increase by about $30 million.

• Geopolitical risks affecting bauxite and aluminum markets, such as supply disruptions from Guinea. - Iceland power curtailments reducing power consumption by about 30 megawatts in Q4, impacting volume and financials. - Repurposing the Hawesville facility involves challenges in diligencing and valuing for potential acquirers.

Q: Could you speak to the process started for the Hawesville facility, when it was kicked off and expected completion?

A: We started the process as there were inbound inquiries, repurposing is different, process will take time as buyers need to diligence and value, significant interest, process will help determine value.

Q: Speak to LME link supply agreements for alumina, when they expire and if they resemble world averages?

A: LME contracts are long-term, through at least 2026, Jamalco's cost structure is expected to be globally competitive and is already being improved.

Q: When does LME-linked contract expire, who are suppliers, and alumina costs in Jamaica?

A: LME contracts are long-term through at least 2026, Jamalco's cost structure is being improved to be globally competitive, resembling world averages of competitors.

Q: Alumina supply agreements, rollover and terms, value added premiums negotiation?

A: One contract extended for a couple years with similar terms, value added premiums are being negotiated now with update expected on Q4 call.

Q: Repurposing industrial asset challenges?

A: Repurposing industrial asset is different as it needs modification for new uses, buyers need to diligence these areas, timing of transaction depends on evaluation.

Q: LME-linked contract expiration, suppliers, alumina costs in Jamaica?

A: LME contracts are long-term through at least 2026, Jamalco's cost structure is being improved to be globally competitive, already underway for a year.

Q: Alumina as percentage of LME, stability next year?

A: Commercial contracts are fixed percentages entered before current run up, quite attractive vs current levels, no readjustment.

Q: Q4 outlook sensitivity and earnings power in current price environment?

A: Spots above 2,600 per ton add about $200 per ton incremental EBITDA, annualized $90 million, Midwest premium rise adds another $20 million, total additional $100 million+ annualized EBITDA from guide.