Century Aluminum Company (CENX) Bundle
A Brief History of Century Aluminum Company
Company Overview
Century Aluminum Company, established in 1995, is a leading producer of primary aluminum. The company operates smelters in the United States and Iceland, focusing on high-quality aluminum production to meet global demand.
Recent Financial Performance
As of September 30, 2024, Century Aluminum reported a net income attributable to stockholders of $291.6 million for the nine months ended, compared to a loss of $73.1 million for the same period in 2023. This significant turnaround reflects improved operational efficiencies and market conditions.
| Financial Metrics | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Net Income (Loss) ($ million) | $42.3 | $(45.9) | $291.6 | $(73.1) |
| Net Sales ($ million) | $539.1 | $473.7 | $1,589.4 | $1,673.1 |
| Gross Profit ($ million) | $81.8 | $52.5 | $118.7 | $66.2 |
| Basic EPS | $0.48 | $(0.45) | $2.98 | $(0.79) |
Production and Sales Volume
In Q3 2024, Century Aluminum shipped approximately 168,755 tonnes of primary aluminum, generating $485.4 million in sales. This was an increase from 171,995 tonnes shipped in Q3 2023, which generated $473.7 million in sales.
| Quarter | Tonnes Shipped | Sales ($ million) |
|---|---|---|
| Q3 2024 | 168,755 | $485.4 |
| Q3 2023 | 171,995 | $473.7 |
Operational Highlights
In 2024, Century Aluminum faced challenges due to fluctuating energy prices, particularly in Europe, where its Vlissingen facility is located. The company has implemented various strategies to mitigate these risks, including financial contracts to hedge fuel costs and power price exposure.
Market and Economic Conditions
Century Aluminum has benefited from favorable market conditions, including increased aluminum prices driven by global demand. The average London Metal Exchange (LME) price for aluminum per tonne was $2,367 for the nine months ended September 30, 2024, compared to $2,272 for the same period in 2023.
| Average Aluminum Price | Q3 2024 | Q3 2023 |
|---|---|---|
| LME Price ($ per tonne) | $2,383 | $2,272 |
Future Outlook
Looking ahead, Century Aluminum aims to enhance production efficiency and reduce costs through technological advancements and strategic partnerships. The company's focus remains on maximizing shareholder value while navigating the complexities of the aluminum market.
A Who Owns Century Aluminum Company (CENX)
Ownership Structure
As of September 30, 2024, Century Aluminum Company (CENX) has a significant ownership stake held by Glencore plc and its affiliates. Glencore beneficially owns 42.9% of Century's outstanding common stock. On a fully diluted basis, this figure increases to 45.9% when accounting for the conversion of all Series A Convertible Preferred Stock.
Major Shareholders
| Shareholder | Ownership Percentage | Type of Shares |
|---|---|---|
| Glencore plc | 42.9% | Common Stock |
| Glencore plc | 45.9% | Fully Diluted (including Series A Convertible Preferred Stock) |
| Other Institutional Investors | Approximately 30.0% | Common Stock |
| Retail Investors | Approximately 27.1% | Common Stock |
Series A Convertible Preferred Stock
All of the outstanding Series A Convertible Preferred Stock, which consists of 51,817 shares as of September 30, 2024, is held by Glencore.
Financial Transactions and Sales
Century Aluminum engages in significant transactions with Glencore, including the purchase and sale of primary aluminum and alumina. For the three months ended September 30, 2024, approximately 61.6% of Century's consolidated net sales were derived from Glencore, compared to 73.5% for the same period in 2023. For the nine months ended September 30, 2024, this figure was 61.1% versus 74.1% in 2023.
Recent Financial Performance
In the nine months ending September 30, 2024, Century Aluminum reported a net income of $291.6 million, a significant recovery from a net loss of $73.1 million in the same period of 2023. The company's gross profit for the same period was $118.7 million, compared to $52.5 million in the prior year.
Shareholder Equity and Stock Information
As of September 30, 2024, the total number of common shares outstanding was 92,798,844, with a par value of $0.01. The total number of authorized common shares is 195,000,000.
Summary of Ownership and Financial Data
| Category | Value |
|---|---|
| Total Common Shares Outstanding | 92,798,844 |
| Total Common Shares Authorized | 195,000,000 |
| Net Income (9 months ended September 30, 2024) | $291.6 million |
| Gross Profit (9 months ended September 30, 2024) | $118.7 million |
| Glencore Ownership Percentage | 42.9% |
| Fully Diluted Ownership Percentage | 45.9% |
Century Aluminum Company (CENX) Mission Statement
Mission Statement Overview
The mission of Century Aluminum Company is to produce high-quality aluminum products while maintaining a commitment to sustainability, safety, and operational excellence. The company aims to leverage innovative technologies and responsible sourcing of raw materials to minimize environmental impact and enhance profitability for stakeholders.
Financial Performance Metrics
As of September 30, 2024, Century Aluminum Company's financial performance demonstrates significant recovery and growth compared to previous periods. Below is a summary of key financial metrics:
| Metric | Q3 2024 | Q2 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|---|
| Net Sales (in millions) | $539.1 | $560.8 | $1,673.1 | $1,589.4 | $1,673.1 |
| Gross Profit (in millions) | $81.8 | $20.4 | $52.5 | $118.7 | $52.5 |
| Net Income (Loss) Attributable to Century Stockholders (in millions) | $47.3 | $(2.5) | $(42.0) | $291.6 | $(73.1) |
| Earnings Per Share (Basic) | $0.48 | $(0.03) | $(0.45) | $2.98 | $(0.79) |
| Total Assets (in millions) | $1,896.9 | $1,846.5 | N/A | N/A | N/A |
Operational Highlights
In 2024, Century Aluminum has focused on optimizing its production capabilities and enhancing operational efficiencies. The following operational highlights are notable:
- Production curtailments at the Hawesville facility have been fully implemented as of August 2022, with ongoing evaluations for potential operational resumption.
- The acquisition of General Alumina Holdings Limited has added significant operational capacity, recognized with a bargain purchase gain of $245.9 million in 2024.
- Average LME price per tonne was $2,383 in Q3 2024, a decline from $2,520 in Q2 2024, reflecting market volatility in aluminum pricing.
Market Trends and Challenges
Market conditions in 2024 have been influenced by fluctuations in global aluminum prices, energy costs, and supply chain dynamics. Century Aluminum's pricing strategy is closely tied to:
- Average MWP (Midwest Premium) decreased to $411 per tonne in Q3 2024 from $431 in Q2 2024.
- Average EDPP (European Duty Paid Premium) increased slightly to $341 per tonne in Q3 2024.
- Challenges related to energy costs, particularly in European markets, continue to impact operational costs and margins.
Sustainability Initiatives
Century Aluminum is committed to sustainable practices and reducing its environmental footprint:
- Implementation of energy-efficient technologies and processes across production facilities.
- Engagement in responsible sourcing of raw materials to support sustainable aluminum production.
- Participation in initiatives related to the Inflation Reduction Act, which includes a production tax credit that benefits domestic aluminum production.
Conclusion on Mission Alignment
The mission statement of Century Aluminum Company aligns with its operational and financial strategies, reflecting a commitment to sustainability, innovation, and stakeholder value. The company's financial recovery in 2024 and focus on operational excellence are key indicators of its strategic direction.
How Century Aluminum Company (CENX) Works
Overview of Operations
Century Aluminum Company primarily engages in the production of primary aluminum. The company operates smelting facilities in the United States and Iceland, focusing on converting alumina into aluminum metal. As of September 30, 2024, the company reported total assets of $1.896 billion, with a significant portion allocated to property, plant, and equipment valued at $965.3 million.
Financial Performance
For the three months ended September 30, 2024, Century Aluminum reported net sales of $539.1 million, a decrease from $560.8 million in the previous quarter. The company's gross profit for the same period was $81.8 million.
| Financial Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Net Sales (in millions) | $539.1 | $560.8 | $473.7 |
| Gross Profit (in millions) | $81.8 | $20.4 | $52.5 |
| Net Income (Loss) (in millions) | $42.3 | ($6.7) | ($45.9) |
Production and Sales
In the third quarter of 2024, Century Aluminum shipped a total of 168,755 tonnes of primary aluminum, with 97,173 tonnes from the United States and 71,582 tonnes from Iceland.
| Region | Tonnes Shipped | Sales Revenue (in millions) |
|---|---|---|
| United States | 97,173 | $282.6 |
| Iceland | 71,582 | $202.8 |
| Total | 168,755 | $485.4 |
Cost Structure
As of September 30, 2024, Century Aluminum recorded total inventories of $544.5 million, consisting of raw materials, work-in-process, and finished goods. The company’s selling, general, and administrative expenses for the nine months ended September 30, 2024, were $42.0 million, reflecting an increase from $36.2 million in the previous year.
Debt and Liquidity
As of September 30, 2024, Century Aluminum had total liabilities of $472.3 million, with current debt due to affiliates amounting to $10.1 million. The company reported cash and cash equivalents of $32.6 million and unused availability under revolving credit facilities totaling $246.3 million.
Recent Developments
In 2024, Century Aluminum recognized a bargain purchase gain of $245.9 million related to its acquisition of General Alumina Holdings Limited, finalized on May 2, 2023. This acquisition has significantly impacted the company's financial results, contributing to a net income of $291.6 million for the nine months ended September 30, 2024.
| Acquisition Metric | Amount (in millions) |
|---|---|
| Bargain Purchase Gain | $245.9 |
| Net Income (Nine Months) | $291.6 |
Tax Considerations
For the nine months ended September 30, 2024, Century Aluminum recorded an income tax expense of $3.0 million, a significant change from a tax benefit of $21.2 million in the prior year. This reflects fluctuations in pre-tax income and jurisdictional mix.
Market Position
Century Aluminum remains a key player in the aluminum production market, with significant sales derived from related party transactions, particularly with Glencore, which accounted for approximately 61.6% of consolidated net sales for the three months ended September 30, 2024.
| Sales to Glencore | Percentage of Total Sales |
|---|---|
| Q3 2024 | 61.6% |
| Q3 2023 | 73.5% |
How Century Aluminum Company (CENX) Makes Money
Revenue Sources
Century Aluminum generates revenue primarily through the production and sale of primary aluminum and alumina. In the third quarter of 2024, the company's net sales amounted to $539.1 million, down from $560.8 million in the previous quarter. For the nine months ended September 30, 2024, total net sales were $1,589.4 million, a decrease from $1,673.1 million in the same period of 2023.
| Period | Net Sales (in millions) | Change from Previous Period |
|---|---|---|
| Q3 2024 | $539.1 | -$21.7 million |
| 9M 2024 | $1,589.4 | -$83.7 million |
Production and Shipment Volumes
In terms of production, Century Aluminum shipped 168,755 tonnes of primary aluminum in Q3 2024, which consisted of 97,173 tonnes from the United States and 71,582 tonnes from Iceland. In comparison, shipments in Q2 2024 totaled 167,908 tonnes.
| Region | Q3 2024 Shipments (tonnes) | Q2 2024 Shipments (tonnes) |
|---|---|---|
| United States | 97,173 | 93,805 |
| Iceland | 71,582 | 74,103 |
| Total | 168,755 | 167,908 |
Cost Structure
The cost of goods sold (COGS) for Q3 2024 was $457.3 million, resulting in a gross profit of $81.8 million. This represents an increase in gross profit compared to $20.4 million in the previous quarter. For the nine months ended September 30, 2024, COGS was $1,470.7 million with a gross profit of $118.7 million.
| Period | COGS (in millions) | Gross Profit (in millions) |
|---|---|---|
| Q3 2024 | $457.3 | $81.8 |
| 9M 2024 | $1,470.7 | $118.7 |
Net Income and Earnings
In Q3 2024, Century Aluminum reported a net income of $42.3 million, compared to a net loss of $45.9 million in Q3 2023. For the nine months ended September 30, 2024, the net income was $280.3 million, a significant improvement from a net loss of $77.9 million in the same period of 2023. The earnings per share (EPS) for Q3 2024 were $0.48 (basic) and $0.46 (diluted).
| Period | Net Income (in millions) | EPS (Basic) | EPS (Diluted) |
|---|---|---|---|
| Q3 2024 | $42.3 | $0.48 | $0.46 |
| 9M 2024 | $280.3 | $2.98 | $2.83 |
Alumina and Raw Material Sales
Century Aluminum's operations also include alumina sales, which are critical to its revenue. For the nine months ended September 30, 2024, the company reported an increase in third-party alumina sales of $37.6 million, partially offsetting declines in other areas. The overall alumina sales strategy is influenced by market conditions and pricing dynamics.
Market Influence and Pricing
The pricing of aluminum is largely driven by the London Metal Exchange (LME) prices, regional premiums, and production costs. In Q3 2024, the average LME price was $2,383 per tonne, down from $2,520 per tonne in Q2 2024. The Midwest premium also saw a decline, averaging $411 in Q3 2024 compared to $431 in Q2 2024.
| Period | Average LME ($ per tonne) | Midwest Premium ($ per tonne) |
|---|---|---|
| Q3 2024 | $2,383 | $411 |
| Q2 2024 | $2,520 | $431 |
Financial Position and Liquidity
As of September 30, 2024, Century Aluminum had cash and cash equivalents of $32.6 million, down from $88.8 million at the end of 2023. The company had unused availability under its revolving credit facilities amounting to $246.3 million.
| Financial Metric | Value (in millions) |
|---|---|
| Cash and Cash Equivalents | $32.6 |
| Unused Availability under Credit Facilities | $246.3 |
Strategic Partnerships
Century Aluminum derives a significant portion of its revenue from strategic partnerships, particularly with Glencore. For Q3 2024, about 61.6% of consolidated net sales were attributed to Glencore, a decrease from 73.5% in Q3 2023. This partnership is essential for both sourcing raw materials and selling finished aluminum products.
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Resources:
- Century Aluminum Company (CENX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Century Aluminum Company (CENX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Century Aluminum Company (CENX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.