Century Aluminium Company, on Thursday, April 30, announced the first-quarter results of 2020, reporting a loss of 3 per cent in net sales from $435.5 million in Q4 2019 to $421.2 in Q1 2020. Shipments stood flat at 202,905 tonnes in Q1, compared to 202,870 tonnes in Q4 last year.
Century reported a net loss of $2.7 million for the first quarter of 2020 and $1.0 million net income on an adjusted basis, compared to a net loss of $4.8 million for the fourth quarter of 2019 and $9.0 million net income on an adjusted basis. The first-quarter results were negatively impacted by $3.7 million of non-cash exceptional items, including a $12.1 million lower of cost or net realizable value inventory adjustment (net of tax), offset by $8.3 million of unrealized gains on forward derivative contracts.
Adjusted EBITDA of the company, however, rose from $13.3 million to $28.1 owing to lower raw material prices, although partially offset by falling regional premiums.
Century had $147.6 million cash in hand at the end of the quarter.
Michael Bless, President and CEO of Century Aluminium commented, “Commodity prices have fallen at an unprecedented pace in reaction to the demand destruction caused by the health crisis. In addition, degradation in the order books of certain customers has caused us to move our product mix to a higher proportion of standard products, thus lowering somewhat the average premium we receive. That said, our plants have maintained their production rates, and we continue to sell all of our metal essentially as it is cast; we have not observed a build of finished goods inventory and do not anticipate such a scenario. In addition, we are seeing meaningful reductions in the price of key inputs, including alumina, and wholesale electric power.”
He also said “We have continued the successful implementation of our cost reduction and cash flow enhancement measures. We have an informed view of second quarter cash flow and possess ample liquidity for the foreseeable future, even if commodity prices were to remain at current levels. We are continually assessing the environment and have myriad options to improve cash flow were we to determine that current (or worse) conditions could persist for a protracted period of time. We intend to balance protection of the Company’s near-term financial strength and flexibility with the preservation of our ability to participate fully in the recovery which will come.”
Commenting on the COVID19, he said Century Aluminium took several mitigating measures to minimise the impact of the virus and sustain operations in this unprecedented environment. Century’s plants remained fully operational and so far recorded only one confirmed case of COVID19.
Responses
